Nasdaq (NASDAQ:NDAQ) and S&P Global (NYSE:SPGI) Financial Review

Nasdaq (NASDAQ:NDAQ) and S&P Global (NYSE:SPGI) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Nasdaq and S&P Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nasdaq	16.36%	15.38%	5.65%
S&P Global	27.27%	14.68%	8.26%

Risk and Volatility

Nasdaq has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500. Comparatively, S&P Global has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.

Institutional & Insider Ownership

72.5% of Nasdaq shares are held by institutional investors. Comparatively, 87.2% of S&P Global shares are held by institutional investors. 0.7% of Nasdaq shares are held by insiders. Comparatively, 0.1% of S&P Global shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Nasdaq and S&P Global, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nasdaq	1	3	13	0	2.71
S&P Global	0	1	14	1	3.00

Nasdaq presently has a consensus price target of $88.06, suggesting a potential downside of 2.08%. S&P Global has a consensus price target of $593.93, suggesting a potential upside of 11.85%. Given S&P Global’s stronger consensus rating and higher probable upside, analysts clearly believe S&P Global is more favorable than Nasdaq.

Valuation & Earnings

This table compares Nasdaq and S&P Global”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nasdaq	$7.40 billion	6.98	$1.12 billion	$2.20	40.88
S&P Global	$14.49 billion	11.24	$3.85 billion	$12.73	41.71

S&P Global has higher revenue and earnings than Nasdaq. Nasdaq is trading at a lower price-to-earnings ratio than S&P Global, indicating that it is currently the more affordable of the two stocks.

Dividends

Nasdaq pays an annual dividend of $1.08 per share and has a dividend yield of 1.2%. S&P Global pays an annual dividend of $3.84 per share and has a dividend yield of 0.7%. Nasdaq pays out 49.1% of its earnings in the form of a dividend. S&P Global pays out 30.2% 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. Nasdaq has increased its dividend for 14 consecutive years and S&P Global has increased its dividend for 53 consecutive years.

Summary

S&P Global beats Nasdaq on 15 of the 18 factors compared between the two stocks.

About Nasdaq

Nasdaq, Inc. operates as a technology company that serves capital markets and other industries worldwide. It operates in three segments: Capital Access Platforms, Financial Technology, and Market Services. The Capital Access Platforms segment sells and distributes historical and real-time market data; and develops and licenses Nasdaq-branded indices and financial products. This segment also offers investor relations intelligence, governance solutions, and ESG solutions; and insights and workflow solutions, as well as operates listing platforms. The Financial Technology segment offers Verafin, a cloud-based platform to detect, investigate, and report money laundering and financial frauds; surveillance solutions, including a SaaS platform to assist in complying with market rules, regulations, and internal market surveillance policies; AxiomSL, a risk data management and regulatory reporting solution; and Calypso, a front-to-back trading technology solution for the financial market. This segment also handles assets, comprising cash equities, equity derivatives, currencies, various interest-bearing securities, commodities, energy products, and digital currencies; and trade management and colocation services. The Market Platforms segment offers equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing, and currency trading services. This segment operates various exchanges and other marketplace facilities across various asset classes which includes derivatives, commodities, cash equity, debt, structured products, and exchange traded products; and provides clearing, settlement, and central depository services. The company was formerly known as The NASDAQ OMX Group, Inc. and changed its name to Nasdaq, Inc. in September 2015. Nasdaq, Inc. was founded in 1971 and is headquartered in New York, New York.

About S&P Global

S&P Global, Inc. engages in the provision of transparent and independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. It operates through the following segments: Market Intelligence, Ratings, Commodity Insights, Mobility, Indices, and Engineering Solutions. The Market Intelligence segment provides multi-asset-class data and analytics integrated with purpose-built workflow solutions. The Ratings segment is involved in credit ratings, research, and analytics, offering investors and other market participants information, ratings, and benchmarks. The Commodity Insights segment focuses on information and benchmark prices for the commodity and energy markets. The Mobility segment offers solutions serving the full automotive value chain including vehicle manufacturers, automotive suppliers, mobility service providers, retailers, consumers, and finance and insurance companies. The Engineering Solutions segment engages in advanced knowledge discovery technologies, research tools, and software-based engineering decision engines to advance innovation, maximize productivity, improve quality, and reduce risk. The company was founded by James H. McGraw and John A. Hill in 1917 and is headquartered in New York, NY.