Intercontinental Exchange (NYSE: ICE) and Virtu Financial (NASDAQ:VIRT) are both mid-cap financials companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, dividends, risk, institutional ownership and valuation.

Institutional & Insider Ownership

89.2% of Intercontinental Exchange shares are owned by institutional investors. Comparatively, 22.4% of Virtu Financial shares are owned by institutional investors. 1.5% of Intercontinental Exchange shares are owned by insiders. Comparatively, 69.9% of Virtu Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Intercontinental Exchange and Virtu Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intercontinental Exchange 0 2 6 0 2.75
Virtu Financial 1 4 1 0 2.00

Intercontinental Exchange presently has a consensus price target of $72.38, indicating a potential upside of 6.70%. Virtu Financial has a consensus price target of $16.67, indicating a potential upside of 8.23%. Given Virtu Financial’s higher probable upside, analysts clearly believe Virtu Financial is more favorable than Intercontinental Exchange.

Dividends

Intercontinental Exchange pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 6.2%. Intercontinental Exchange pays out 29.1% of its earnings in the form of a dividend. Virtu Financial pays out 800.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Intercontinental Exchange has raised its dividend for 3 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Intercontinental Exchange 27.91% 11.01% 2.18%
Virtu Financial 0.13% 11.56% 1.60%

Valuation & Earnings

This table compares Intercontinental Exchange and Virtu Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Intercontinental Exchange $5.96 billion 6.66 $1.42 billion $2.75 24.67
Virtu Financial $702.27 million 4.11 $32.98 million $0.12 128.33

Intercontinental Exchange has higher revenue and earnings than Virtu Financial. Intercontinental Exchange is trading at a lower price-to-earnings ratio than Virtu Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Intercontinental Exchange beats Virtu Financial on 11 of the 16 factors compared between the two stocks.

Intercontinental Exchange Company Profile

Intercontinental Exchange Inc, formerly IntercontinentalExchange Group, Inc., is a network of regulated exchanges and clearing houses for financial and commodity markets. The Company delivers transparent and accessible data, technology and risk management services to markets around the world through its portfolio of exchanges, including the New York Stock Exchange, ICE Futures, Liffe and Euronext. In February 2014, the Company completed the acquisition of Singapore Mercantile Exchange. In July 2014, Intercontinental Exchange Inc sold its Wombat Financial Software, a unit of NYSE Technologies. Effective September 10, 2014, Intercontinental Exchange Inc acquired an undisclosed majority interest in Holland Clearing House NV.

Virtu Financial Company Profile

Virtu Financial, Inc. is a holding company. The Company is a technology-enabled market maker and liquidity provider to the financial markets across the world. It is engaged in buying or selling a range of securities and other financial instruments and earning small bid/ask spreads across various transactions. It has a single, multi-asset, multi-currency technology platform, through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on exchanges, markets and liquidity pools in various countries around the world. It makes markets in a range of different assets classes, such as Americas Equities; Europe, the Middle East and Africa (EMEA) Equities; Asia Pacific (APAC) Equities; Global Commodities; Global Currencies, and Options, Fixed Income and Other Securities. It makes markets for global banks, brokers and other intermediaries, and indirectly provides services to retail and institutional investors.

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