Intercontinental Exchange (OTCMKTS: OTCM) and OTC Markets Group (OTCMKTS:OTCM) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
This is a summary of current recommendations for Intercontinental Exchange and OTC Markets Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|OTC Markets Group||0||0||0||0||N/A|
Intercontinental Exchange presently has a consensus price target of $81.33, suggesting a potential upside of 5.85%. Given Intercontinental Exchange’s higher possible upside, analysts clearly believe Intercontinental Exchange is more favorable than OTC Markets Group.
Valuation & Earnings
This table compares Intercontinental Exchange and OTC Markets Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Intercontinental Exchange||$5.83 billion||7.54||$2.51 billion||$2.95||26.00|
|OTC Markets Group||$52.18 million||6.36||$12.56 million||$1.82||15.80|
Intercontinental Exchange has higher revenue and earnings than OTC Markets Group. OTC Markets Group is trading at a lower price-to-earnings ratio than Intercontinental Exchange, indicating that it is currently the more affordable of the two stocks.
Intercontinental Exchange pays an annual dividend of $0.96 per share and has a dividend yield of 1.3%. OTC Markets Group pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. Intercontinental Exchange pays out 32.5% of its earnings in the form of a dividend. OTC Markets Group pays out 30.8% 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. Intercontinental Exchange has raised its dividend for 4 consecutive years. OTC Markets Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Intercontinental Exchange has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, OTC Markets Group has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500.
This table compares Intercontinental Exchange and OTC Markets Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|OTC Markets Group||26.16%||134.80%||61.02%|
Institutional and Insider Ownership
88.6% of Intercontinental Exchange shares are owned by institutional investors. Comparatively, 0.0% of OTC Markets Group shares are owned by institutional investors. 1.5% of Intercontinental Exchange shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Intercontinental Exchange beats OTC Markets Group on 12 of the 16 factors compared between the two stocks.
Intercontinental Exchange Company Profile
Intercontinental Exchange, Inc. operates regulated exchanges, clearing houses, and listings venues for financial and commodity markets in the United States, the United Kingdom, Continental Europe, Asia, Israel, and Canada. It operates through two segments, Trading and Clearing; and Data and Listings. The company operates marketplaces for listing, trading, and clearing an array of derivatives and securities contracts across various asset classes, including energy and agricultural commodities, interest rates, equities, equity and credit derivatives, exchange traded funds, bonds, and currencies. It also offers end-to-end data services and solutions to support the trading, investment, risk management, and connectivity needs of customers across major asset classes. The company operates exchanges and marketplaces, such as ICE Futures Europe, ICE Futures U.S., ICE Futures Canada, ICE Endex, ICE Futures Singapore, NYSE America Options, and NYSE Arca Options, as well as over-the-counter markets for physical energy and credit default swaps, and central counterparty clearing houses. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.
OTC Markets Group Company Profile
OTC Markets Group Inc. engages in the financial market business in the United States. It offers OTC Link Alternative Trading System, which connects a network of brokers-dealers providing liquidity and execution services for various securities. The company also provides investors, traders, institutions, and regulators with a suite of enterprise and user level market data licenses through direct or extranet connectivity, third party market data redistributors, or order management systems. In addition, it offers OTC Disclosure & News Service for posting financial reports, disclosure documents, and news releases; Real-Time Level 2 Quote Display, a service that companies sponsor to provide their investors with access to real-time level 2 quotes available on otcmarkets.com; and Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws. The company was formerly known as Pink OTC Markets Inc. and changed its name to OTC Markets Group Inc. in January 2011. OTC Markets Group Inc. was founded in 1904 and is headquartered in New York, New York.
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