MarketAxess (NASDAQ:MKTX) and GAMCO Investors (NYSE:GAMI) Head-To-Head Comparison

GAMCO Investors (NYSE:GAMIGet Free Report) and MarketAxess (NASDAQ:MKTXGet Free Report) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Dividends

GAMCO Investors pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. MarketAxess pays an annual dividend of $2.88 per share and has a dividend yield of 1.3%. GAMCO Investors pays out 6.3% of its earnings in the form of a dividend. MarketAxess pays out 43.7% 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. MarketAxess has increased its dividend for 15 consecutive years. MarketAxess is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares GAMCO Investors and MarketAxess’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GAMCO Investors $258.75 million 1.86 $65.56 million $2.55 7.51
MarketAxess $718.30 million 11.55 $250.22 million $6.59 33.23

MarketAxess has higher revenue and earnings than GAMCO Investors. GAMCO Investors is trading at a lower price-to-earnings ratio than MarketAxess, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GAMCO Investors and MarketAxess’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GAMCO Investors 27.08% 41.96% 27.29%
MarketAxess 33.78% 21.86% 15.12%

Institutional & Insider Ownership

0.6% of GAMCO Investors shares are owned by institutional investors. Comparatively, 99.0% of MarketAxess shares are owned by institutional investors. 81.2% of GAMCO Investors shares are owned by company insiders. Comparatively, 2.0% of MarketAxess shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

GAMCO Investors has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, MarketAxess has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for GAMCO Investors and MarketAxess, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GAMCO Investors 0 0 0 0 N/A
MarketAxess 1 4 4 0 2.33

MarketAxess has a consensus target price of $266.89, suggesting a potential upside of 21.89%. Given MarketAxess’ higher probable upside, analysts clearly believe MarketAxess is more favorable than GAMCO Investors.

Summary

MarketAxess beats GAMCO Investors on 11 of the 16 factors compared between the two stocks.

About GAMCO Investors

(Get Free Report)

GAMCO Investors, Inc. is a publicly owned holding investment manager. The firm also provides wealth management, investment advisory, institutional research, brokerage, dealer, underwriting, and distribution services to its clients. It provides its services to individuals including high net worth individuals, corporate pension and profit-sharing plans, foundations, endowments, jointly trust plans, municipalities, and investment companies. The firm, through its subsidiaries, manages separate client-focused equity, fixed income, and balanced portfolios. It also launches equity, fixed income, and balanced mutual funds and manages equity mutual funds for its clients. Through its subsidiaries the firm invests in the public equity and fixed income markets across the globe. It invests in value stocks of companies. The firm employs fundamental analysis with a focus on bottom-up stock picking approach to create its portfolios. It conducts in-house research to make its investments. The firm was founded in 1976 and is based in Rye, New York with additional offices in Greenwich, Connecticut; Bannockburn, Illinois; and Tokyo, Japan. GAMCO Investors, Inc. operates as a subsidiary of Ggcp Holdings Llc.

About MarketAxess

(Get Free Report)

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform for institutional investor and broker-dealer companies worldwide. It offers the access to liquidity in the U.S. investment-grade bonds, U.S. high-yield bonds, and U.S. Treasuries, as well as municipal bonds, emerging market debts, Eurobonds, and other fixed-income securities. The company, through its Open Trading protocols, executes bond trades between and among institutional investor and broker-dealer clients in an all-to-all anonymous trading environment for corporate bonds. It also offers trading-related products and services, including composite+ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments. In addition, the company provides various pre-and post-trade services, such as 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 incorporated in 2000 and is headquartered in New York.

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