MarketAxess (NASDAQ: MKTX) and Cowen Group (NASDAQ:COWN) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.
This table compares MarketAxess and Cowen Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
99.8% of MarketAxess shares are owned by institutional investors. Comparatively, 85.8% of Cowen Group shares are owned by institutional investors. 4.0% of MarketAxess shares are owned by insiders. Comparatively, 4.9% of Cowen Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
MarketAxess has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Cowen Group has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.
MarketAxess pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. Cowen Group does not pay a dividend. MarketAxess pays out 43.1% of its earnings in the form of a dividend.
This is a summary of current ratings and recommmendations for MarketAxess and Cowen Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MarketAxess presently has a consensus price target of $209.80, suggesting a potential upside of 3.29%. Cowen Group has a consensus price target of $17.00, suggesting a potential upside of 12.58%. Given Cowen Group’s stronger consensus rating and higher probable upside, analysts clearly believe Cowen Group is more favorable than MarketAxess.
Earnings and Valuation
This table compares MarketAxess and Cowen Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MarketAxess||$397.47 million||19.23||$148.08 million||$3.90||52.08|
|Cowen Group||$658.78 million||0.68||-$60.88 million||N/A||N/A|
MarketAxess has higher earnings, but lower revenue than Cowen Group.
MarketAxess beats Cowen Group on 8 of the 15 factors compared between the two stocks.
MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. It offers institutional investor and broker-dealer the access to global liquidity in U.S. high-grade corporate bonds, emerging markets and high-yield bonds, European bonds, U.S. agency bonds, municipal bonds, credit default swaps, and other fixed-income securities. The company, through its Open Trading protocol, executes trades in certain bonds between and among institutional investor and broker-dealer clients in an all-to-all trading environment on a matched principal basis. It also offers trading-related products and services, including market data to assist clients with trading decisions; connectivity solutions that facilitate straight-through processing; technology services to optimize trading environments; and execution services for exchange-traded fund managers and other clients. In addition, the company, through its Trax division, offers a range of pre-and post-trade services, including trade matching, trade publication, regulatory transaction reporting, and market and reference data across a range of fixed-income and other products. MarketAxess Holdings Inc. was founded in 2000 and is headquartered in New York, New York.
About Cowen Group
Cowen Inc., formerly Cowen Group, Inc., is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research, and a sales and trading platform for institutional investors. Its alternative investment platform, which operates under the Ramius name, offers investment products and solutions across the liquidity spectrum to institutional and private clients. Ramius offers investors access to strategies to meet their specific needs, including long/short equity and event driven equity.
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