Critical Survey: MarketAxess (MKTX) & China Finance Online (JRJC)

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MarketAxess (NASDAQ: MKTX) and China Finance Online (NASDAQ:JRJC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Earnings & Valuation

This table compares MarketAxess and China Finance Online’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 18.78 $148.08 million $3.90 51.39
China Finance Online $42.62 million 1.05 -$36.73 million N/A N/A

MarketAxess has higher revenue and earnings than China Finance Online.

Profitability

This table compares MarketAxess and China Finance Online’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MarketAxess 37.61% 29.82% 27.00%
China Finance Online -86.19% -64.41% -29.03%

Institutional and Insider Ownership

99.9% of MarketAxess shares are owned by institutional investors. Comparatively, 2.7% of China Finance Online shares are owned by institutional investors. 3.5% of MarketAxess shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

MarketAxess pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. China Finance Online does not pay a dividend. MarketAxess pays out 43.1% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for MarketAxess and China Finance Online, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MarketAxess 0 6 0 0 2.00
China Finance Online 0 0 0 0 N/A

MarketAxess presently has a consensus price target of $209.80, indicating a potential upside of 4.67%. Given MarketAxess’ higher probable upside, equities analysts clearly believe MarketAxess is more favorable than China Finance Online.

Risk and Volatility

MarketAxess has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, China Finance Online has a beta of 1.97, meaning that its stock price is 97% more volatile than the S&P 500.

Summary

MarketAxess beats China Finance Online on 10 of the 12 factors compared between the two stocks.

About MarketAxess

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 China Finance Online

China Finance Online Co. Limited provides Web-based financial services in the People's Republic of China and Hong Kong. The company operates through three segments: Commodities Brokerage Services; Online Financial Information and Advisory Service, and Other Related Services; and Hong Kong Brokerage Services. It provides online access to securities and commodities trading services, wealth management products, and securities investment advisory services to retail investors; and financial database and analytics to institutional investors, including financial, research, academic, and regulatory institutions, as well as financial software products. The company is involved in the operation of Yinglibao, an Internet-based financial platform that integrates wealth management solutions and mutual fund distribution; Securities Master, an integrated securities trading platform; and Investment Master, a Web-based mobile investment advisory service platform that facilitates securities investment advisors to communicate with their clients and followers. In addition, it provides commodities brokerage services; and securities and futures contracts brokerage, and related services to its customers, who invest in stocks listed on Hong Kong Stock Exchange. The company offers its products and services to individual investors managing their own money; professional investors, such as institutional investors managing large sums of money on behalf of their clients and high net worth individuals; and other financial professionals, including investment bankers, stock analysts and financial reporters, and middle class individuals. China Finance Online Co. Limited has strategic cooperation agreements with CITIC Securities and China Investment Securities Co., Ltd. to develop finance technology for investment advisory and wealth management services. The company was founded in 1998 and is based in Beijing, the People's Republic of China.

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