Financial Comparison: MarketAxess (MKTX) vs. Raymond James Financial (RJF)

MarketAxess (NASDAQ: MKTX) and Raymond James Financial (NYSE:RJF) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Profitability

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This table compares MarketAxess and Raymond James Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MarketAxess 37.26% 29.54% 26.72%
Raymond James Financial 9.00% 14.87% 2.42%

Volatility and Risk

MarketAxess has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Raymond James Financial has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500.

Institutional and Insider Ownership

99.8% of MarketAxess shares are owned by institutional investors. Comparatively, 71.0% of Raymond James Financial shares are owned by institutional investors. 4.0% of MarketAxess shares are owned by company insiders. Comparatively, 10.5% of Raymond James Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

MarketAxess pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. Raymond James Financial pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. MarketAxess pays out 43.1% of its earnings in the form of a dividend. Raymond James Financial pays out 19.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Raymond James Financial has increased its dividend for 5 consecutive years. Raymond James Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for MarketAxess and Raymond James Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MarketAxess 0 6 0 0 2.00
Raymond James Financial 0 2 5 0 2.71

MarketAxess presently has a consensus price target of $209.80, suggesting a potential upside of 2.64%. Raymond James Financial has a consensus price target of $101.14, suggesting a potential upside of 16.86%. Given Raymond James Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Raymond James Financial is more favorable than MarketAxess.

Earnings & Valuation

This table compares MarketAxess and Raymond James Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MarketAxess $397.47 million 19.35 $148.08 million $3.90 52.41
Raymond James Financial $6.52 billion 1.93 $636.23 million $5.23 16.55

Raymond James Financial has higher revenue and earnings than MarketAxess. Raymond James Financial is trading at a lower price-to-earnings ratio than MarketAxess, indicating that it is currently the more affordable of the two stocks.

Summary

Raymond James Financial beats MarketAxess on 11 of the 17 factors compared between the two stocks.

About MarketAxess

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. It offers institutional investor and broker-dealer the access to global liquidity in U.S. high-grade corporate bonds, emerging markets and high-yield bonds, European bonds, U.S. agency bonds, municipal bonds, credit default swaps, and other fixed-income securities. The company, through its Open Trading protocol, executes trades in certain bonds between and among institutional investor and broker-dealer clients in an all-to-all trading environment on a matched principal basis. It also 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 and other clients. In addition, the company, through its Trax division, offers a range of pre-and post-trade services, including trade matching, trade publication, regulatory transaction reporting, and market and reference data across a range of fixed-income and other products. MarketAxess Holdings Inc. was founded in 2000 and is headquartered in New York, New York.

About Raymond James Financial

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

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