MarketAxess (MKTX) versus Its Competitors Critical Survey

MarketAxess (NASDAQ: MKTX) is one of 31 publicly-traded companies in the “Security brokers & dealers” industry, but how does it contrast to its peers? We will compare MarketAxess to similar businesses based on the strength of its dividends, institutional ownership, profitability, analyst recommendations, earnings, risk and valuation.

Valuation and Earnings

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This table compares MarketAxess and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
MarketAxess $397.47 million $148.08 million 52.41
MarketAxess Competitors $5.87 billion $745.79 million 24.14

MarketAxess’ peers have higher revenue and earnings than MarketAxess. MarketAxess is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares MarketAxess and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MarketAxess 37.26% 29.54% 26.72%
MarketAxess Competitors 5.53% 3.64% 5.12%

Risk and Volatility

MarketAxess has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, MarketAxess’ peers have a beta of 8.84, suggesting that their average share price is 784% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for MarketAxess and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MarketAxess 0 6 0 0 2.00
MarketAxess Competitors 322 1375 1441 67 2.39

MarketAxess presently has a consensus target price of $209.80, suggesting a potential upside of 2.64%. As a group, “Security brokers & dealers” companies have a potential downside of 0.15%. Given MarketAxess’ higher possible upside, equities analysts clearly believe MarketAxess is more favorable than its peers.

Dividends

MarketAxess pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. MarketAxess pays out 43.1% of its earnings in the form of a dividend. As a group, “Security brokers & dealers” companies pay a dividend yield of 1.6% and pay out 35.0% of their earnings in the form of a dividend. MarketAxess lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Insider and Institutional Ownership

99.8% of MarketAxess shares are held by institutional investors. Comparatively, 66.3% of shares of all “Security brokers & dealers” companies are held by institutional investors. 4.0% of MarketAxess shares are held by company insiders. Comparatively, 21.4% of shares of all “Security brokers & dealers” companies 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

MarketAxess peers beat MarketAxess on 9 of the 15 factors compared.

MarketAxess Company Profile

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.

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