Head to Head Review: ONEX (OTCMKTS:ONEXF) and Virtus Investment Partners (NASDAQ:VRTS)

ONEX (OTCMKTS:ONEXF) and Virtus Investment Partners (NASDAQ:VRTS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Volatility & Risk

ONEX has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Virtus Investment Partners has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.

Profitability

This table compares ONEX and Virtus Investment Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ONEX	63.83%	5.24%	4.21%
Virtus Investment Partners	13.42%	21.56%	5.27%

Dividends

ONEX pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Virtus Investment Partners pays an annual dividend of $9.80 per share and has a dividend yield of 7.5%. ONEX pays out 4.2% of its earnings in the form of a dividend. Virtus Investment Partners pays out 55.8% 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.

Insider and Institutional Ownership

0.7% of ONEX shares are held by institutional investors. Comparatively, 80.5% of Virtus Investment Partners shares are held by institutional investors. 6.4% of Virtus Investment Partners shares are held by company 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.

Earnings & Valuation

This table compares ONEX and Virtus Investment Partners”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEX	$899.00 million	6.12	$617.00 million	$6.68	10.79
Virtus Investment Partners	$819.58 million	1.06	$121.75 million	$17.55	7.49

ONEX has higher revenue and earnings than Virtus Investment Partners. Virtus Investment Partners is trading at a lower price-to-earnings ratio than ONEX, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ONEX and Virtus Investment Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEX	0	2	3	0	2.60
Virtus Investment Partners	2	2	1	0	1.80

Virtus Investment Partners has a consensus target price of $143.00, suggesting a potential upside of 8.72%. Given Virtus Investment Partners’ higher probable upside, analysts plainly believe Virtus Investment Partners is more favorable than ONEX.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

About Virtus Investment Partners

Virtus Investment Partners, Inc. is a publicly owned investment manager. The firm primarily provides its services to individual and institutional clients. It launches separate client focused equity and fixed income portfolios. The firm launches equity, fixed income, and balanced mutual funds for its clients. It invests in the public equity, fixed income, and real estate markets. The firm also invests in exchange traded funds. It employs a multi manager approach for its products. The firm employs quantitative analysis to make its investments. It benchmarks the performance of its portfolios against the S&P 500 Index. The firm conducts in-house research to make its investments. Virtus Investment Partners, Inc. was founded in 1988 and is based in Hartford, Connecticut.