Financial Comparison: Virtu Financial (VIRT) vs. Raymond James (RJF)

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

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virtu Financial $1.02 billion 5.48 $2.93 million $0.57 52.28
Raymond James $6.52 billion 2.15 $636.23 million $5.23 18.36

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

Profitability

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

Net Margins Return on Equity Return on Assets
Virtu Financial 11.08% 20.32% 3.21%
Raymond James 10.52% 15.36% 2.52%

Volatility and Risk

Virtu Financial has a beta of -0.67, suggesting that its stock price is 167% less volatile than the S&P 500. Comparatively, Raymond James has a beta of 1.63, suggesting that its stock price is 63% more volatile than the S&P 500.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.2%. Raymond James pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Virtu Financial pays out 168.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Raymond James pays out 19.1% of its earnings in the form of a dividend. Raymond James has increased its dividend for 5 consecutive years.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 0 5 3 0 2.38
Raymond James 0 3 6 0 2.67

Virtu Financial currently has a consensus price target of $34.75, suggesting a potential upside of 16.61%. Raymond James has a consensus price target of $101.33, suggesting a potential upside of 5.53%. Given Virtu Financial’s higher possible upside, research analysts plainly believe Virtu Financial is more favorable than Raymond James.

Insider & Institutional Ownership

25.5% of Virtu Financial shares are owned by institutional investors. Comparatively, 71.0% of Raymond James shares are owned by institutional investors. 73.5% of Virtu Financial shares are owned by insiders. Comparatively, 10.5% of Raymond James shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Raymond James beats Virtu Financial on 9 of the 17 factors compared between the two stocks.

About Virtu Financial

Virtu Financial, Inc., together with its subsidiaries, provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide. The company's Market Making segment principally consists of market making in the cash, futures, and options markets across equities, options, fixed income, currencies, and commodities. Its Execution Services segment comprises agency-based trading and trading venues, which offer execution services in equities, ETFs, futures, and fixed income to institutions, banks, and broker dealers. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

About Raymond James

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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