Merriman (OTCMKTS:MERR) and Virtu Financial (NASDAQ:VIRT) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.8%. Merriman does not pay a dividend. Virtu Financial pays out 49.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Merriman and Virtu Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Merriman N/A N/A N/A N/A N/A
Virtu Financial $1.88 billion 2.55 $289.44 million $1.96 12.87

Virtu Financial has higher revenue and earnings than Merriman.

Insider and Institutional Ownership

55.7% of Virtu Financial shares are held by institutional investors. 63.0% of Merriman shares are held by insiders. Comparatively, 73.5% of Virtu Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Merriman and Virtu Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merriman N/A N/A N/A
Virtu Financial 15.39% 24.62% 4.82%

Analyst Recommendations

This is a summary of current ratings for Merriman and Virtu Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merriman 0 0 0 0 N/A
Virtu Financial 0 6 4 0 2.40

Virtu Financial has a consensus price target of $29.50, indicating a potential upside of 16.97%. Given Virtu Financial’s higher possible upside, analysts clearly believe Virtu Financial is more favorable than Merriman.

Risk & Volatility

Merriman has a beta of 2.33, meaning that its share price is 133% more volatile than the S&P 500. Comparatively, Virtu Financial has a beta of -0.73, meaning that its share price is 173% less volatile than the S&P 500.

Summary

Virtu Financial beats Merriman on 9 of the 11 factors compared between the two stocks.

About Merriman

Merriman Holdings, Inc., through its subsidiary, Merriman Capital, Inc., provides capital market advisory and research, corporate, and investment banking services primarily in the United States and Canada. The company's investment banking services include corporate financing services, such as initial public offerings, secondary offerings, and private placements services; and strategic advisory services comprise transaction-specific advice regarding mergers and acquisitions, divestitures, spin-offs, and privatizations, as well as general strategic advice. It also offers institutional brokerage services, including institutional sales trading and equity execution, and options execution services to institutional clients. In addition, the company executes securities transactions for money managers, mutual funds, hedge funds, insurance companies, and pension and profit-sharing plans; and provides integrated research and trading solutions, as well as capital markets advisory services. It primarily serves institutional investors and corporate clients. The company was formerly known as Merriman Curhan Ford Group, Inc. and changed its name to Merriman Holdings, Inc. in August 2010. Merriman Holdings, Inc. was founded in 1987 and is headquartered in San Francisco, California.

About Virtu Financial

Virtu Financial, Inc., together with its subsidiaries, provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide. The company's Market Making segment principally consists of market making in the cash, futures, and options markets across equities, options, fixed income, currencies, and commodities. Its Execution Services segment comprises agency-based trading and trading venues, which offer execution services in equities, ETFs, futures, and fixed income to institutions, banks, and broker dealers. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

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