Contrasting Virtu Financial (VIRT) and Stifel Financial (SF)

Virtu Financial (NASDAQ: VIRT) and Stifel Financial (NYSE:SF) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 4.5%. Stifel Financial pays an annual dividend of $0.48 per share and has a dividend yield of 0.9%. Virtu Financial pays out 168.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stifel Financial pays out 12.0% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Virtu Financial and Stifel Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virtu Financial $1.02 billion 3.92 $2.93 million $0.57 37.02
Stifel Financial $2.93 billion 1.30 $182.87 million $3.99 13.44

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Virtu Financial and Stifel Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 0 5 3 0 2.38
Stifel Financial 0 1 4 0 2.80

Virtu Financial currently has a consensus target price of $29.78, indicating a potential upside of 41.13%. Stifel Financial has a consensus target price of $76.33, indicating a potential upside of 42.33%. Given Stifel Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Stifel Financial is more favorable than Virtu Financial.

Institutional and Insider Ownership

26.4% of Virtu Financial shares are owned by institutional investors. Comparatively, 86.8% of Stifel Financial shares are owned by institutional investors. 73.5% of Virtu Financial shares are owned by company insiders. Comparatively, 5.1% of Stifel Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Virtu Financial and Stifel Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virtu Financial 11.30% 19.62% 3.41%
Stifel Financial 7.97% 13.91% 1.79%

Risk & Volatility

Virtu Financial has a beta of -0.86, indicating that its share price is 186% less volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.75, indicating that its share price is 75% more volatile than the S&P 500.

Summary

Stifel Financial beats Virtu Financial on 9 of the 16 factors compared between the two stocks.

About Virtu Financial

Virtu Financial, Inc., together with its subsidiaries, provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide. The company's Market Making segment principally consists of market making in the cash, futures, and options markets across equities, options, fixed income, currencies, and commodities. Its Execution Services segment comprises agency-based trading and trading venues, which offer execution services in equities, ETFs, futures, and fixed income to institutions, banks, and broker dealers. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

About Stifel Financial

Stifel Financial Corp., a financial services and bank holding company, provides retail and institutional wealth management, and investment banking services to individual investors, corporations, municipalities, and institutions in the United States, the United Kingdom, and rest of Europe. The company operates through three segments: Global Wealth Management, Institutional Group, and Other. It provides private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading and research, and municipal finance services; investment banking services, such as mergers and acquisitions, public offerings, and private placements; and retail and commercial banking services comprising personal and commercial lending programs, as well as deposit accounts. The company also manages and participates in underwritings for corporate and public finance. Stifel Financial Corp. was founded in 1890 and is headquartered in St. Louis, Missouri.

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