GFI Group (NASDAQ: GFIG) and KCG Holdings, Inc. Class A (NYSE:KCG) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.
This is a summary of recent recommendations for GFI Group and KCG Holdings, Inc. Class A, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|KCG Holdings, Inc. Class A||0||3||0||0||2.00|
KCG Holdings, Inc. Class A has a consensus price target of $20.00, indicating a potential upside of 0.00%. Given KCG Holdings, Inc. Class A’s higher probable upside, analysts clearly believe KCG Holdings, Inc. Class A is more favorable than GFI Group.
Insider & Institutional Ownership
82.4% of KCG Holdings, Inc. Class A shares are held by institutional investors. 9.4% of KCG Holdings, Inc. Class A shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares GFI Group and KCG Holdings, Inc. Class A’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|KCG Holdings, Inc. Class A||16.25%||15.36%||3.35%|
Risk and Volatility
GFI Group has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, KCG Holdings, Inc. Class A has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.
Valuation & Earnings
This table compares GFI Group and KCG Holdings, Inc. Class A’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|KCG Holdings, Inc. Class A||N/A||N/A||N/A||$2.61||7.66|
GFI Group is trading at a lower price-to-earnings ratio than KCG Holdings, Inc. Class A, indicating that it is currently the more affordable of the two stocks.
KCG Holdings, Inc. Class A beats GFI Group on 6 of the 8 factors compared between the two stocks.
GFI Group Company Profile
GFI Group Inc. is an intermediary and provider of trading technologies and support services to the global over-the-counter (OTC) and listed markets. The Company provides brokerage and trade execution services, clearing services, market data and trading platform and other software products to institutional customers. It has four segments: Americas Brokerage; Europe, the Middle East and Africa (EMEA) Brokerage; Asia Brokerage, and Clearing and Backed Trading. The Company’s brokerage operations provide brokerage services in four broad product categories: fixed income, financial, equity and commodity. The Company’s Clearing and Backed Trading segment offers clearing, risk management, settlement and other back-office services, as well as provides capital to start-up trading groups, small hedge funds, market-makers and individual traders. The Company is also engaged in cash bond and futures contracts brokerage services, clearing services and analytical and trading software businesses.
KCG Holdings, Inc. Class A Company Profile
KCG Holdings, Inc. is a holding company. The Company is an independent securities company offering investors a range of services designed to address trading needs across asset classes, product types and time zones. The Company combines technology with client service across market making, agency execution and venues. It has multiple access points to trade global equities, fixed income, currencies and commodities via voice or automated execution. The Company serves clients and operates in the markets through three primary businesses, which includes Market Making, Global Execution Services and Venues. In July 2013, the Company announced the completion of the merger whereby Knight Capital Group, Inc. and GETCO Holding Company, LLC had been combined as part of KCG Holdings, Inc.
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