MarketAxess (NASDAQ:MKTX – Get Free Report) and T. Rowe Price Group (NASDAQ:TROW – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.
Institutional & Insider Ownership
99.0% of MarketAxess shares are held by institutional investors. Comparatively, 73.4% of T. Rowe Price Group shares are held by institutional investors. 0.7% of MarketAxess shares are held by insiders. Comparatively, 1.6% of T. Rowe Price Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Dividends
MarketAxess pays an annual dividend of $3.12 per share and has a dividend yield of 1.9%. T. Rowe Price Group pays an annual dividend of $5.20 per share and has a dividend yield of 5.0%. MarketAxess pays out 36.8% of its earnings in the form of a dividend. T. Rowe Price Group pays out 52.2% 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 2 consecutive years and T. Rowe Price Group has increased its dividend for 39 consecutive years. T. Rowe Price Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MarketAxess | $846.27 million | 6.83 | $246.63 million | $8.48 | 19.36 |
| T. Rowe Price Group | $7.31 billion | 3.05 | $2.09 billion | $9.97 | 10.49 |
T. Rowe Price Group has higher revenue and earnings than MarketAxess. T. Rowe Price Group is trading at a lower price-to-earnings ratio than MarketAxess, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
MarketAxess has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, T. Rowe Price Group has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.
Profitability
This table compares MarketAxess and T. Rowe Price Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MarketAxess | 35.22% | 22.48% | 12.84% |
| T. Rowe Price Group | 29.26% | 20.91% | 15.68% |
Analyst Recommendations
This is a summary of recent ratings and price targets for MarketAxess and T. Rowe Price Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MarketAxess | 0 | 12 | 1 | 0 | 2.08 |
| T. Rowe Price Group | 3 | 9 | 1 | 0 | 1.85 |
MarketAxess presently has a consensus price target of $156.10, indicating a potential downside of 4.90%. T. Rowe Price Group has a consensus price target of $105.92, indicating a potential upside of 1.25%. Given T. Rowe Price Group’s higher possible upside, analysts plainly believe T. Rowe Price Group is more favorable than MarketAxess.
Summary
T. Rowe Price Group beats MarketAxess on 9 of the 16 factors compared between the two stocks.
About MarketAxess
MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform for institutional investor and broker-dealer companies worldwide. The company offers trading technology that provides liquidity access in U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, eurobonds, municipal bonds, U.S. government bonds, and other fixed-income securities; and executes bond trades between and among institutional investor and broker-dealer clients in an all-to-all anonymous trading environment for corporate bonds through its Open Trading protocols. It also provides 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 offers 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, New York.
About T. Rowe Price Group
T. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; New York, New York; Philadelphia, Pennsylvania; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Shanghai, China; Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, Amsterdam, Netherlands and Washington, DC.
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