Head to Head Contrast: Investment Technology Group (NYSE:ITG) versus Greenhill & Co. (GHL)

Investment Technology Group (NYSE: ITG) and Greenhill & Co. (NYSE:GHL) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitabiliy and dividends.

Volatility and Risk

Investment Technology Group has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Greenhill & Co. has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Investment Technology Group and Greenhill & Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Investment Technology Group -1.77% 3.08% 1.42%
Greenhill & Co. 13.98% 15.64% 10.30%

Earnings and Valuation

This table compares Investment Technology Group and Greenhill & Co.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Investment Technology Group $461.59 million 1.48 -$8.61 million ($0.26) -79.12
Greenhill & Co. $299.08 million 1.65 $39.37 million $1.33 12.56

Greenhill & Co. has higher revenue, but lower earnings than Investment Technology Group. Investment Technology Group is trading at a lower price-to-earnings ratio than Greenhill & Co., indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

87.2% of Investment Technology Group shares are held by institutional investors. Comparatively, 94.4% of Greenhill & Co. shares are held by institutional investors. 2.4% of Investment Technology Group shares are held by insiders. Comparatively, 8.3% of Greenhill & Co. shares are held by 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.

Dividends

Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Greenhill & Co. pays an annual dividend of $1.80 per share and has a dividend yield of 10.8%. Investment Technology Group pays out -107.7% of its earnings in the form of a dividend. Greenhill & Co. pays out 135.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations for Investment Technology Group and Greenhill & Co., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investment Technology Group 0 0 1 0 3.00
Greenhill & Co. 5 1 0 0 1.17

Investment Technology Group presently has a consensus target price of $20.00, indicating a potential downside of 2.77%. Greenhill & Co. has a consensus target price of $21.17, indicating a potential upside of 26.75%. Given Greenhill & Co.’s higher probable upside, analysts clearly believe Greenhill & Co. is more favorable than Investment Technology Group.

Summary

Greenhill & Co. beats Investment Technology Group on 10 of the 16 factors compared between the two stocks.

About Investment Technology Group

Investment Technology Group, Inc. (ITG) is a financial technology company that helps brokers and asset managers improve returns for investors around the world. The Company operates through four segments: U.S. Operations, Canadian Operations, European Operations and Asia Pacific Operations. These four segments provide categories of products and services, such as Execution Services, Workflow Technology and Analytics. Execution Services includes self-directed trading using algorithms, smart routing and matching through POSIT in cash equities, futures and options trading and portfolio trading and high-touch trading desks providing execution expertise. Workflow Technology includes trade order and execution management software applications in addition to network connectivity. Analytics includes tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance; portfolio construction and optimization decisions, and securities valuation.

About Greenhill & Co.

Greenhill & Co., Inc. is an investment bank. The Company provides financial and strategic advice on domestic and cross-border mergers and acquisitions, divestitures, restructurings, financings, capital raising and other transactions to a diverse client base, including corporations, partnerships, institutions and governments globally. The Company also provides advice in connection with defense preparedness, activist response strategies and other mission critical situations. The Company acts for clients located across the world from its offices located in the United States, Australia, Brazil, Canada, Germany, Hong Kong, Japan, Sweden, and the United Kingdom. The Company’s subsidiaries provide advisory services in various jurisdictions. Its operating entities include Greenhill & Co., LLC (G&Co), Greenhill & Co. International LLP (GCI), Greenhill & Co. Europe LLP (GCE), Greenhill & Co. Australia Pty Limited (Greenhill Australia) and Greenhill Cogent, LP (GC LP).

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