MarketAxess (MKTX) and Its Rivals Financial Review

MarketAxess (NASDAQ: MKTX) is one of 31 publicly-traded companies in the “Security brokers & dealers” industry, but how does it compare to its competitors? We will compare MarketAxess to related companies based on the strength of its earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Profitability

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This table compares MarketAxess and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MarketAxess 37.26% 29.54% 26.72%
MarketAxess Competitors 5.55% 3.62% 5.12%

Dividends

MarketAxess pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. MarketAxess pays out 43.1% 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. MarketAxess lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Institutional and Insider Ownership

99.8% of MarketAxess shares are owned by institutional investors. Comparatively, 63.6% of shares of all “Security brokers & dealers” companies are owned by institutional investors. 4.0% of MarketAxess 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 endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for MarketAxess and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MarketAxess 0 4 1 0 2.20
MarketAxess Competitors 318 1364 1430 67 2.39

MarketAxess presently has a consensus price target of $209.80, suggesting a potential upside of 1.51%. As a group, “Security brokers & dealers” companies have a potential upside of 1.65%. Given MarketAxess’ competitors stronger consensus rating and higher possible upside, analysts plainly believe MarketAxess has less favorable growth aspects than its competitors.

Valuation & Earnings

This table compares MarketAxess and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
MarketAxess $397.47 million $148.08 million 52.99
MarketAxess Competitors $5.87 billion $745.79 million 23.88

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

Volatility & Risk

MarketAxess has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, MarketAxess’ competitors have a beta of 8.84, meaning that their average share price is 784% more volatile than the S&P 500.

Summary

MarketAxess competitors beat MarketAxess on 10 of the 15 factors compared.

MarketAxess Company Profile

MarketAxess Holdings Inc. operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments using its trading technology. Institutional investor and broker-dealer firms are users of trading platform, accessing global liquidity in the United States corporate bonds, emerging markets and high-yield bonds, European bonds, the United States agency bonds, municipal bonds, credit default swaps and other fixed-income securities. Through Open Trading protocols, it executes trades in certain bonds between and among institutional investor and broker-dealer clients in a trading environment on a matched principal basis. It offers trading-related products and services, including market data to assist clients with trading decisions; connectivity solutions that facilitate straight-through processing; technology services to optimize trading environments, and execution services for exchange-traded fund managers.

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