Critical Comparison: Interactive Brokers Group (IBKR) and The Competition

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

Dividends

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Interactive Brokers Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Interactive Brokers Group pays out 26.1% 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.

Valuation & Earnings

This table compares Interactive Brokers Group and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Interactive Brokers Group $1.93 billion $76.00 million 45.17
Interactive Brokers Group Competitors $5.87 billion $745.79 million 23.88

Interactive Brokers Group’s rivals have higher revenue and earnings than Interactive Brokers Group. Interactive Brokers Group 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 Interactive Brokers Group and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Interactive Brokers Group 3.94% 1.74% 0.18%
Interactive Brokers Group Competitors 5.55% 3.62% 5.12%

Volatility & Risk

Interactive Brokers Group has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Interactive Brokers Group’s rivals have a beta of 8.84, indicating that their average stock price is 784% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Interactive Brokers Group and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Interactive Brokers Group 1 2 3 0 2.33
Interactive Brokers Group Competitors 318 1364 1430 67 2.39

Interactive Brokers Group currently has a consensus target price of $56.75, suggesting a potential downside of 17.88%. As a group, “Security brokers & dealers” companies have a potential upside of 2.47%. Given Interactive Brokers Group’s rivals stronger consensus rating and higher possible upside, analysts clearly believe Interactive Brokers Group has less favorable growth aspects than its rivals.

Insider and Institutional Ownership

15.9% of Interactive Brokers Group shares are held by institutional investors. Comparatively, 63.6% of shares of all “Security brokers & dealers” companies are held by institutional investors. 2.0% of Interactive Brokers Group shares are held by company insiders. Comparatively, 21.8% of shares of all “Security brokers & dealers” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Interactive Brokers Group rivals beat Interactive Brokers Group on 12 of the 15 factors compared.

Interactive Brokers Group Company Profile

Interactive Brokers Group, Inc. (IBG, Inc.) is a holding company. The Company is an automated global electronic broker and market maker specializing in routing orders, and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on over 120 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers. It operates in two segments: electronic brokerage and market making. It conducts its electronic brokerage business through its Interactive Brokers (IB) subsidiaries. It conducts its market making business through its Timber Hill (TH) subsidiaries. In the United States, it conducts its business from Greenwich, Connecticut and Chicago, Illinois. Outside the United States, it conducts business in Canada, England, Switzerland, Liechtenstein, China (Hong Kong and Shanghai), India, Australia and Japan.

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