Nasdaq (NASDAQ: NDAQ) and Virtu Financial (NASDAQ:VIRT) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitabiliy, dividends, institutional ownership and analyst recommendations.
Valuation and Earnings
This table compares Nasdaq and Virtu Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nasdaq||$3.77 billion||3.19||$1.19 billion||$0.83||87.64|
|Virtu Financial||$567.89 million||1.17||$29.28 million||$0.72||22.78|
Nasdaq has higher revenue and earnings than Virtu Financial. Virtu Financial is trading at a lower price-to-earnings ratio than Nasdaq, indicating that it is currently the more affordable of the two stocks.
This table compares Nasdaq and Virtu Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
74.7% of Nasdaq shares are held by institutional investors. Comparatively, 90.6% of Virtu Financial shares are held by institutional investors. 1.6% of Nasdaq shares are held by insiders. Comparatively, 69.9% of Virtu Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Nasdaq has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Virtu Financial has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for Nasdaq and Virtu Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nasdaq currently has a consensus target price of $73.11, suggesting a potential upside of 0.51%. Virtu Financial has a consensus target price of $14.50, suggesting a potential downside of 11.59%. Given Nasdaq’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Nasdaq is more favorable than Virtu Financial.
Nasdaq pays an annual dividend of $1.52 per share and has a dividend yield of 2.1%. Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.9%. Nasdaq pays out 183.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Virtu Financial pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Virtu Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Nasdaq beats Virtu Financial on 9 of the 16 factors compared between the two stocks.
Nasdaq Company Profile
Nasdaq, Inc. (Nasdaq) is a holding company. The Company is a provider of trading, clearing, exchange technology, regulatory, securities listing, information and public company services. It manages, operates and provides its products and services through four segments: Market Services, Corporate Services, Information Services and Market Technology. Its global offerings include trading and clearing across various asset classes, trade management services, data products, financial indexes, capital formation solutions, corporate solutions, and market technology products and services. Its technology markets across the globe, supporting equity derivative trading, clearing and settlement, cash equity trading, fixed income trading and various other functions. Its Market Services segment include its equity derivative trading and clearing, cash equity trading, fixed income clearing corporation and trade management services businesses. Its Corporate Solutions business serves corporate clients.
Virtu Financial Company Profile
Virtu Financial, Inc. is a holding company. The Company is a technology-enabled market maker and liquidity provider to the financial markets across the world. It is engaged in buying or selling a range of securities and other financial instruments and earning small bid/ask spreads across various transactions. It has a single, multi-asset, multi-currency technology platform, through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on exchanges, markets and liquidity pools in various countries around the world. It makes markets in a range of different assets classes, such as Americas Equities; Europe, the Middle East and Africa (EMEA) Equities; Asia Pacific (APAC) Equities; Global Commodities; Global Currencies, and Options, Fixed Income and Other Securities. It makes markets for global banks, brokers and other intermediaries, and indirectly provides services to retail and institutional investors.
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