Head-To-Head Review: MarketAxess (NASDAQ:MKTX) and Moelis & Company (NYSE:MC)

MarketAxess (NASDAQ:MKTX) and Moelis & Company (NYSE:MC) are both mid-cap 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.

Dividends

MarketAxess pays an annual dividend of $3.04 per share and has a dividend yield of 1.7%. Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 3.9%. MarketAxess pays out 45.6% of its earnings in the form of a dividend. Moelis & Company pays out 88.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MarketAxess has increased its dividend for 2 consecutive years and Moelis & Company has increased its dividend for 1 consecutive years.

Earnings and Valuation

This table compares MarketAxess and Moelis & Company”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MarketAxess	$846.27 million	7.88	$246.63 million	$6.66	26.93
Moelis & Company	$1.52 billion	3.40	$233.04 million	$2.94	22.43

MarketAxess has higher earnings, but lower revenue than Moelis & Company. Moelis & Company is trading at a lower price-to-earnings ratio than MarketAxess, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

99.0% of MarketAxess shares are held by institutional investors. Comparatively, 91.5% of Moelis & Company shares are held by institutional investors. 0.7% of MarketAxess shares are held by company insiders. Comparatively, 6.4% of Moelis & Company 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.

Profitability

This table compares MarketAxess and Moelis & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MarketAxess	29.14%	20.88%	14.30%
Moelis & Company	15.36%	43.19%	18.91%

Volatility & Risk

MarketAxess has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Moelis & Company has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for MarketAxess and Moelis & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MarketAxess	1	7	4	0	2.25
Moelis & Company	0	10	2	0	2.17

MarketAxess presently has a consensus target price of $200.40, suggesting a potential upside of 11.73%. Moelis & Company has a consensus target price of $76.33, suggesting a potential upside of 15.77%. Given Moelis & Company’s higher possible upside, analysts clearly believe Moelis & Company is more favorable than MarketAxess.

Summary

MarketAxess beats Moelis & Company on 10 of the 17 factors compared between the two stocks.

About MarketAxess

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.

About Moelis & Company

Moelis & Co. operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.