Financial Analysis: Virtu Financial (NYSE:VIRT) versus T. Rowe Price Group (NASDAQ:TROW)

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

Volatility & Risk

T. Rowe Price Group has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500. Comparatively, Virtu Financial has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for T. Rowe Price Group and Virtu Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T. Rowe Price Group	3	9	1	0	1.85
Virtu Financial	1	2	5	0	2.50

T. Rowe Price Group presently has a consensus target price of $105.92, suggesting a potential upside of 2.24%. Virtu Financial has a consensus target price of $63.80, suggesting a potential upside of 3.52%. Given Virtu Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Virtu Financial is more favorable than T. Rowe Price Group.

Profitability

This table compares T. Rowe Price Group and Virtu Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T. Rowe Price Group	29.26%	20.91%	15.68%
Virtu Financial	13.50%	49.06%	4.28%

Earnings & Valuation

This table compares T. Rowe Price Group and Virtu Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T. Rowe Price Group	$7.31 billion	3.02	$2.09 billion	$9.97	10.39
Virtu Financial	$3.63 billion	2.63	$468.36 million	$6.02	10.24

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

Dividends

T. Rowe Price Group pays an annual dividend of $5.20 per share and has a dividend yield of 5.0%. Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 1.6%. T. Rowe Price Group pays out 52.2% of its earnings in the form of a dividend. Virtu Financial pays out 15.9% 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. T. Rowe Price Group has increased its dividend for 39 consecutive years. T. Rowe Price Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

73.4% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 45.8% of Virtu Financial shares are held by institutional investors. 1.6% of T. Rowe Price Group shares are held by company insiders. Comparatively, 46.8% of Virtu Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

T. Rowe Price Group beats Virtu Financial on 11 of the 17 factors compared between the two stocks.

About T. Rowe Price Group

T. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; New York, New York; Philadelphia, Pennsylvania; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Shanghai, China; Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, Amsterdam, Netherlands and Washington, DC.

About Virtu Financial

Virtu Financial, Inc., a financial services company, provides data, analytics, and connectivity products to clients worldwide. The company operates in two segments, Market Making and Execution Services. Its product suite includes offerings in execution, liquidity sourcing, analytics and broker-neutral, and multi-dealer platforms in workflow technology. The company’s solutions enable clients to trade on various venues across countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income, cryptocurrencies, and other commodities. Its analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across markets. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.