Analyzing MarketAxess (MKTX) and Its Rivals

MarketAxess (NASDAQ:MKTX) is one of 1,743 public companies in the “Capital Markets” industry, but how does it contrast to its rivals? We will compare MarketAxess to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, dividends, profitability and risk.

Institutional & Insider Ownership

99.0% of MarketAxess shares are owned by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are owned by institutional investors. 0.7% of MarketAxess shares are owned by company insiders. Comparatively, 13.1% of shares of all “Capital Markets” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for MarketAxess and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MarketAxess	0	12	1	0	2.08
MarketAxess Competitors	5561	20139	22479	642	2.37

MarketAxess presently has a consensus target price of $159.44, suggesting a potential downside of 3.71%. As a group, “Capital Markets” companies have a potential upside of 26.53%. Given MarketAxess’ rivals stronger consensus rating and higher possible upside, analysts clearly believe MarketAxess has less favorable growth aspects than its rivals.

Valuation and Earnings

This table compares MarketAxess and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
MarketAxess	$846.27 million	$246.63 million	20.27
MarketAxess Competitors	$5.22 billion	$399.10 million	17.84

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MarketAxess	33.51%	23.15%	12.43%
MarketAxess Competitors	318.24%	11.44%	3.69%

Dividends

MarketAxess pays an annual dividend of $3.12 per share and has a dividend yield of 1.9%. MarketAxess pays out 38.2% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.1% of their earnings in the form of a dividend. MarketAxess has increased its dividend for 2 consecutive years. MarketAxess lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Risk and Volatility

MarketAxess has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, MarketAxess’ rivals have a beta of 0.79, indicating that their average stock price is 21% less volatile than the S&P 500.

Summary

MarketAxess rivals beat MarketAxess on 10 of the 15 factors compared.

MarketAxess Company Profile

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform for institutional investor and broker-dealer companies worldwide. The company offers trading technology that provides liquidity access in U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, eurobonds, municipal bonds, U.S. government bonds, and other fixed-income securities; and executes bond trades between and among institutional investor and broker-dealer clients in an all-to-all anonymous trading environment for corporate bonds through its Open Trading protocols. It also provides trading-related products and services, including composite+ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments. In addition, the company offers various pre-and post-trade services, such as 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 incorporated in 2000 and is headquartered in New York, New York.