Nasdaq (NASDAQ: NDAQ) and Yintech Investment Holdings Limited (NASDAQ:YIN) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.

Insider and Institutional Ownership

74.4% of Nasdaq shares are held by institutional investors. Comparatively, 1.6% of Yintech Investment Holdings Limited shares are held by institutional investors. 1.6% of Nasdaq shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Nasdaq and Yintech Investment Holdings Limited’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nasdaq $3.87 billion 3.19 $1.21 billion $1.28 57.91
Yintech Investment Holdings Limited $506.89 million 1.87 $150.76 million $2.15 6.28

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Nasdaq and Yintech Investment Holdings Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nasdaq 1 5 3 0 2.22
Yintech Investment Holdings Limited 0 0 1 0 3.00

Nasdaq currently has a consensus price target of $75.56, indicating a potential upside of 1.94%. Yintech Investment Holdings Limited has a consensus price target of $15.00, indicating a potential upside of 11.11%. Given Yintech Investment Holdings Limited’s stronger consensus rating and higher probable upside, analysts clearly believe Yintech Investment Holdings Limited is more favorable than Nasdaq.

Profitability

This table compares Nasdaq and Yintech Investment Holdings Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nasdaq 5.76% 12.19% 4.64%
Yintech Investment Holdings Limited 30.09% 33.52% 28.50%

Dividends

Nasdaq pays an annual dividend of $1.52 per share and has a dividend yield of 2.1%. Yintech Investment Holdings Limited pays an annual dividend of $0.80 per share and has a dividend yield of 5.9%. Nasdaq pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Yintech Investment Holdings Limited pays out 37.2% of its earnings in the form of a dividend. Yintech Investment Holdings Limited is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Nasdaq has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Yintech Investment Holdings Limited has a beta of -0.78, indicating that its share price is 178% less volatile than the S&P 500.

Nasdaq Company Profile

Nasdaq, Inc. (Nasdaq) is a holding company. The Company is a provider of trading, clearing, exchange technology, regulatory, securities listing, information and public company services. It manages, operates and provides its products and services through four segments: Market Services, Corporate Services, Information Services and Market Technology. Its global offerings include trading and clearing across various asset classes, trade management services, data products, financial indexes, capital formation solutions, corporate solutions, and market technology products and services. Its technology markets across the globe, supporting equity derivative trading, clearing and settlement, cash equity trading, fixed income trading and various other functions. Its Market Services segment include its equity derivative trading and clearing, cash equity trading, fixed income clearing corporation and trade management services businesses. Its Corporate Solutions business serves corporate clients.

Yintech Investment Holdings Limited Company Profile

Yintech Investment Holdings Limited is an online provider of spot commodity trading services in China. The Company facilitates the trading by individual customers of silver, gold, and other precious metals and commodities on the Shanghai Gold Exchange, the Tianjin Precious Metals Exchange and the Guangdong Precious Metals Exchange. The Company provides its customers with various services, such as account opening, investor education, market information, research, live discussion boards and real-time customer support. On the Tianjin Precious Metals Exchange and the Guangdong Precious Metals Exchange, the Company serves as counterparty to its customers’ trades. On the Shanghai Gold Exchange, the Company serves as an agent and does not hold principal positions. The Company’s services include investor education, market information provision and research. Its research services include research reports, online lectures, live market commentaries and quantitative analysis.

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