Critical Survey: Intercontinental Exchange (ICE) versus Yintech Investment (YIN)

Intercontinental Exchange (NYSE: ICE) and Yintech Investment (NASDAQ:YIN) are both financials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings for Intercontinental Exchange and Yintech Investment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intercontinental Exchange 0 2 6 0 2.75
Yintech Investment 0 0 1 0 3.00

Intercontinental Exchange currently has a consensus price target of $74.50, indicating a potential downside of 0.68%. Yintech Investment has a consensus price target of $15.00, indicating a potential upside of 62.34%. Given Yintech Investment’s stronger consensus rating and higher probable upside, analysts plainly believe Yintech Investment is more favorable than Intercontinental Exchange.

Risk & Volatility

Intercontinental Exchange has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Yintech Investment has a beta of -1.15, suggesting that its stock price is 215% less volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Intercontinental Exchange $5.96 billion 7.37 $1.42 billion $2.75 27.28
Yintech Investment $391.70 million 1.65 $134.04 million $1.73 5.34

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

Dividends

Intercontinental Exchange pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Yintech Investment pays an annual dividend of $0.80 per share and has a dividend yield of 8.7%. Intercontinental Exchange pays out 29.1% of its earnings in the form of a dividend. Yintech Investment pays out 46.2% 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. Intercontinental Exchange has increased its dividend for 4 consecutive years.

Profitability

This table compares Intercontinental Exchange and Yintech Investment’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%
Yintech Investment 27.84% 26.59% 22.91%

Insider & Institutional Ownership

90.1% of Intercontinental Exchange shares are owned by institutional investors. Comparatively, 1.3% of Yintech Investment shares are owned by institutional investors. 1.5% of Intercontinental Exchange shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Intercontinental Exchange beats Yintech Investment on 12 of the 17 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.

Yintech Investment 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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