Critical Comparison: OTC Markets Group (OTCM) & National (NHLD)

OTC Markets Group (OTCMKTS:OTCM) and National (NASDAQ:NHLD) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for OTC Markets Group and National, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OTC Markets Group 0 0 0 0 N/A
National 0 0 0 0 N/A

Dividends

OTC Markets Group pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. National does not pay a dividend. OTC Markets Group pays out 33.0% of its earnings in the form of a dividend.

Risk & Volatility

OTC Markets Group has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, National has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Insider and Institutional Ownership

0.0% of OTC Markets Group shares are owned by institutional investors. Comparatively, 13.7% of National shares are owned by institutional investors. 9.2% of National shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares OTC Markets Group and National’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OTC Markets Group $52.18 million 6.93 $12.56 million $1.82 17.21
National $211.12 million 0.19 -$11.51 million N/A N/A

OTC Markets Group has higher earnings, but lower revenue than National.

Profitability

This table compares OTC Markets Group and National’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OTC Markets Group 27.31% N/A N/A
National -5.45% -8.65% -5.57%

Summary

OTC Markets Group beats National on 6 of the 11 factors compared between the two stocks.

OTC Markets Group Company Profile

OTC Markets Group Inc. engages in the financial market business in the United States. It offers OTC Link Alternative Trading System, which connects a network of brokers-dealers providing liquidity and execution services for various securities. The company also provides investors, traders, institutions, and regulators with a suite of enterprise and user level market data licenses through direct or extranet connectivity, third party market data redistributors, or order management systems. In addition, it offers OTC Disclosure & News Service for posting financial reports, disclosure documents, and news releases; Real-Time Level 2 Quote Display, a service that companies sponsor to provide their investors with access to real-time level 2 quotes available on otcmarkets.com; and Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws. The company was formerly known as Pink OTC Markets Inc. and changed its name to OTC Markets Group Inc. in January 2011. OTC Markets Group Inc. was founded in 1904 and is headquartered in New York, New York.

National Company Profile

National Holdings Corporation, through its subsidiaries, provides financial services in the United States. The company offers retail brokerage services include execution of purchases and sale of stocks, options, bonds, mutual funds, annuities, and various other securities; and investment advisory services for individual, corporate, and institutional clients. It also provides investment banking services, such as underwriting the sale of securities to the public in initial and follow-on offering, and arranging for the private placement of securities with investors; and financial and corporate advisory services comprising mergers and acquisitions, project financing, capital structure, and specific financing opportunities to micro, small, and mid-cap high growth companies. In addition, the company trades in securities, including making markets in micro and small-cap, NASDAQ, and other exchange listed stocks and provides liquidity in the United States Treasury marketplace. Further, it provides asset management advisory services to retail clients; fixed insurance products, including life insurance, disability insurance, long-term care insurance, and fixed annuities; and tax preparation services to individuals, primarily in the middle and upper income tax brackets, as well as accounting services to small and midsize companies. Additionally, the company offers licensed mortgage brokerage services; and investment products and services, which comprise stocks, bonds, mutual funds, annuities, insurance, and managed money accounts. The company was formerly known as Olympic Cascade Financial Corporation and changed its name to National Holdings Corporation in March 2006. The company was founded in 1947 and is headquartered in New York, New York. National Holdings Corporation is a subsidiary of FBIO Acquisition, Inc.

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