Analyzing LPL Financial (NASDAQ:LPLA) & Global Brokerage (NASDAQ:GLBR)

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LPL Financial (NASDAQ:LPLA) and Global Brokerage (OTCMKTS:GLBR) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Profitability

This table compares LPL Financial and Global Brokerage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LPL Financial 9.77% 57.63% 10.63%
Global Brokerage N/A N/A N/A

Earnings & Valuation

This table compares LPL Financial and Global Brokerage’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LPL Financial $5.19 billion 1.23 $439.46 million $5.33 14.59
Global Brokerage $284.06 million 0.00 $70.64 million N/A N/A

LPL Financial has higher revenue and earnings than Global Brokerage.

Analyst Recommendations

This is a breakdown of current recommendations for LPL Financial and Global Brokerage, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LPL Financial 0 3 4 0 2.57
Global Brokerage 0 0 0 0 N/A

LPL Financial currently has a consensus target price of $87.19, indicating a potential upside of 12.10%. Given LPL Financial’s higher possible upside, analysts plainly believe LPL Financial is more favorable than Global Brokerage.

Insider & Institutional Ownership

94.0% of LPL Financial shares are held by institutional investors. 2.2% of LPL Financial shares are held by company insiders. Comparatively, 9.0% of Global Brokerage shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

LPL Financial pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Global Brokerage does not pay a dividend. LPL Financial pays out 18.8% of its earnings in the form of a dividend.

Volatility & Risk

LPL Financial has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Global Brokerage has a beta of 4.07, indicating that its stock price is 307% more volatile than the S&P 500.

Summary

LPL Financial beats Global Brokerage on 10 of the 13 factors compared between the two stocks.

About LPL Financial

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and 529 education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and business development companies. The company also provides fee-based advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers cash sweep programs; and retirement solutions for commission- and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; and trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1968 and is based in Boston, Massachusetts.

About Global Brokerage

Global brokerage, Inc., formerly FXCM Inc. (FXCM), is engaged in providing online foreign exchange (FX) trading, contract for difference (CFD) trading, spread betting and related services. The Company owns over 50% of FXCM Group, LLC (FXCM Group). FXCM Group is a holding company of Forex Capital Markets LLC, (FXCM US), Forex Capital Markets Limited, inclusive of all EU branches (FXCM UK), FXCM Australia Pty. Limited, (FXCM AU). The Company focuses on providing global traders with access to market by offering trading tools, hiring trading educators. In addition, FXCM offers educational courses on FX trading and provides trading tools data and resources. FXCM Pro provides retail brokers, small hedge funds and market banks access to wholesale execution and liquidity, as well as providing high and medium frequency funds access to prime brokerage services through FXCM Prime.

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