Contrasting BlackRock (BLK) & Investment Technology Group (ITG)

BlackRock (NYSE: BLK) and Investment Technology Group (NYSE:ITG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BlackRock $12.49 billion 6.71 $4.97 billion $22.60 23.16
Investment Technology Group $483.69 million 1.47 -$39.44 million $0.30 71.97

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

Risk and Volatility

BlackRock has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500. Comparatively, Investment Technology Group has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500.

Dividends

BlackRock pays an annual dividend of $11.52 per share and has a dividend yield of 2.2%. Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. BlackRock pays out 51.0% of its earnings in the form of a dividend. Investment Technology Group pays out 93.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BlackRock has increased its dividend for 8 consecutive years. BlackRock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

83.8% of BlackRock shares are owned by institutional investors. Comparatively, 85.1% of Investment Technology Group shares are owned by institutional investors. 1.8% of BlackRock shares are owned by company insiders. Comparatively, 3.0% of Investment Technology Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for BlackRock and Investment Technology Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock 0 4 8 0 2.67
Investment Technology Group 0 0 2 0 3.00

BlackRock presently has a consensus price target of $562.67, indicating a potential upside of 7.51%. Investment Technology Group has a consensus price target of $21.00, indicating a potential downside of 2.73%. Given BlackRock’s higher probable upside, equities analysts plainly believe BlackRock is more favorable than Investment Technology Group.

Profitability

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

Net Margins Return on Equity Return on Assets
BlackRock 39.22% 12.76% 1.80%
Investment Technology Group -8.17% 3.88% 1.76%

Summary

BlackRock beats Investment Technology Group on 13 of the 17 factors compared between the two stocks.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.

About Investment Technology Group

Investment Technology Group, Inc. operates as a financial technology company in the United States, Canada, Europe, and the Asia Pacific. The company offers various solutions for asset managers and broker-dealers in the areas of execution services, workflow technology, and analytics that provide trade execution services and solutions for portfolio management, as well as pre-trade analytics, and post-trade analytics and processing. The company's products include POSIT, a point-in-time electronic crossing network for equity orders and price improvement opportunities; algorithms and smart order routers that offers portfolio managers and traders a way to trade orders; and single stock and portfolio trading, as well as derivatives execution and technology services focusing on sell-side clients, professional traders, and select hedge funds. It also provides Execution Management System, which offers execution and analytical tools for global list-based and single-stock trading, futures and options, and a financial services communications network; and Order Management System that combines portfolio management and compliance functionality. In addition, the company provides ITG Net, a financial communications network; RFQ-hub, a multi-asset platform for financial instruments; Single Ticket Clearing, a broker-neutral operational service; and Commission Manager, a Web-based commission management portal. Further, it offers Trading Analytics, which enables portfolio managers and traders to enhance execution performance through trading analytics and risk models; and Portfolio Analytics that assists asset managers with portfolio decision-making tasks from portfolio construction and optimization. Additionally, the company provides software development and maintenance services; and workflow technology solutions and network connectivity services for the financial community. Investment Technology Group, Inc. was founded in 1983 and is headquartered in New York, New York.

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