Deutsche Boerse (OTCMKTS: DBOEY) and Daiwa Securities Group (OTCMKTS:DSEEY) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

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This table compares Deutsche Boerse and Daiwa Securities Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deutsche Boerse 31.94% 18.07% 0.53%
Daiwa Securities Group 15.28% 7.35% 0.50%

Dividends

Deutsche Boerse pays an annual dividend of $0.17 per share and has a dividend yield of 1.2%. Daiwa Securities Group pays an annual dividend of $0.08 per share and has a dividend yield of 1.2%. Deutsche Boerse pays out 32.1% of its earnings in the form of a dividend. Daiwa Securities Group pays out 14.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Deutsche Boerse and Daiwa Securities Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deutsche Boerse 0 4 0 0 2.00
Daiwa Securities Group 0 0 0 0 N/A

Valuation & Earnings

This table compares Deutsche Boerse and Daiwa Securities Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Deutsche Boerse $3.17 billion 8.30 $987.63 million $0.53 25.69
Daiwa Securities Group $5.70 billion 1.98 $967.83 million $0.56 11.84

Deutsche Boerse has higher earnings, but lower revenue than Daiwa Securities Group. Daiwa Securities Group is trading at a lower price-to-earnings ratio than Deutsche Boerse, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

0.1% of Deutsche Boerse shares are owned by institutional investors. Comparatively, 0.1% of Daiwa Securities Group shares are owned by institutional investors. 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.

Risk & Volatility

Deutsche Boerse has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Daiwa Securities Group has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Summary

Deutsche Boerse beats Daiwa Securities Group on 7 of the 12 factors compared between the two stocks.

Deutsche Boerse Company Profile

Deutsche Börse Aktiengesellschaft operates as an exchange organization in Europe, the United States, and the Asia-Pacific. Its activities cover securities and derivatives trading, clearing, settlement, and custody services; market data; and development and operation of electronic trading systems. The company operates through four segments: Eurex, Xetra, Clearstream, and Market Data + Services. The Eurex segment engages in the electronic trading of European derivatives, commodities, and foreign exchange. It operates Eurex Repo over the counter (OTC) trading platform; electronic clearing architecture; and a central counterparty for on-and-off exchange derivatives and repo transactions. The Xetra segment operates in the cash market through Xetra and Borse Frankfurt and Tradegate trading venues; operates Eurex bonds OTC trading platform; operates as a central counterparty for equities and bonds; and provides admission of securities to listing. The Clearstream segment offers custody and settlement services for domestic and international securities; global securities financing services and collateral management; and investment and hedge funds services. The Market Data + Services segment distributes licenses for trading and market signals; develops and sells indices; provides technology solutions for external customers; and trades in participant connectivity. Deutsche Börse Aktiengesellschaft is headquartered in Frankfurt, Germany.

Daiwa Securities Group Company Profile

Daiwa Securities Group Inc., together with its subsidiaries, primarily operates as a securities broker-dealer in Japan and internationally. The company operates in four segments: Retail, Wholesale, Asset management, and Investment. It provides brokerage, trading, underwriting, strategic advice, product development, and structured finance services. The Retail segment offers online and telephone-based securities-related services through a network of 146 branches and sales offices, as well as non-face-to-face channels comprising the Internet and call centers. The wholesale segment provides sales and trading services of equities, bonds, foreign exchange, and derivative products to customers, including institutional investors and corporations, as well as underwriting services for equities and bonds, initial public offerings, and merger and acquisition advisory services. The Asset Management segment establishes and manages investment trusts primarily for individual investors and financial institutions; offers investment advisory services to pension funds and other institutional investors; and manages assets. The Investment segment engages in investment activities, such as venture investments, private equity investments, corporate loan investments, and energy investments. The company also provides research and consulting, information systems, banking, and other support services, as well as investment management, advisory, and agency services; and lends and borrows real estate properties. The company was formerly known as Daiwa Securities Co. Ltd. and changed its name to Daiwa Securities Group Inc. in 1999. Daiwa Securities Group Inc. was founded in 1902 and is headquartered in Tokyo, Japan.

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