Financial Analysis: Interactive Brokers Group (IBKR) versus The Competition

Interactive Brokers Group (NASDAQ: IBKR) is one of 31 public companies in the “Security brokers & dealers” industry, but how does it weigh in compared to its rivals? We will compare Interactive Brokers Group to similar businesses based on the strength of its earnings, institutional ownership, analyst recommendations, profitability, valuation, dividends and risk.

Valuation & Earnings

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This table compares Interactive Brokers Group and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Interactive Brokers Group $1.93 billion $76.00 million 45.17
Interactive Brokers Group Competitors $5.87 billion $745.79 million 23.88

Interactive Brokers Group’s rivals have higher revenue and earnings than Interactive Brokers Group. Interactive Brokers Group is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Interactive Brokers Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Interactive Brokers Group pays out 26.1% of its earnings in the form of a dividend. As a group, “Security brokers & dealers” companies pay a dividend yield of 1.6% and pay out 35.0% of their earnings in the form of a dividend.

Insider and Institutional Ownership

15.9% of Interactive Brokers Group shares are owned by institutional investors. Comparatively, 63.6% of shares of all “Security brokers & dealers” companies are owned by institutional investors. 2.0% of Interactive Brokers Group shares are owned by insiders. Comparatively, 21.8% of shares of all “Security brokers & dealers” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Interactive Brokers Group and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Interactive Brokers Group 3.94% 1.74% 0.18%
Interactive Brokers Group Competitors 5.55% 3.62% 5.12%

Analyst Recommendations

This is a summary of current ratings for Interactive Brokers Group and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interactive Brokers Group 1 2 3 0 2.33
Interactive Brokers Group Competitors 318 1364 1430 67 2.39

Interactive Brokers Group presently has a consensus price target of $56.75, indicating a potential downside of 17.88%. As a group, “Security brokers & dealers” companies have a potential upside of 2.48%. Given Interactive Brokers Group’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Interactive Brokers Group has less favorable growth aspects than its rivals.

Volatility and Risk

Interactive Brokers Group has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, Interactive Brokers Group’s rivals have a beta of 8.84, suggesting that their average stock price is 784% more volatile than the S&P 500.

Summary

Interactive Brokers Group rivals beat Interactive Brokers Group on 12 of the 15 factors compared.

Interactive Brokers Group Company Profile

Interactive Brokers Group, Inc. (IBG, Inc.) is a holding company. The Company is an automated global electronic broker and market maker specializing in routing orders, and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on over 120 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers. It operates in two segments: electronic brokerage and market making. It conducts its electronic brokerage business through its Interactive Brokers (IB) subsidiaries. It conducts its market making business through its Timber Hill (TH) subsidiaries. In the United States, it conducts its business from Greenwich, Connecticut and Chicago, Illinois. Outside the United States, it conducts business in Canada, England, Switzerland, Liechtenstein, China (Hong Kong and Shanghai), India, Australia and Japan.

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