Reviewing Intercontinental Exchange (NYSE:ICE) & Westwood Holdings Group (NYSE:WHG)

Intercontinental Exchange (NYSE:ICE) and Westwood Holdings Group (NYSE:WHG) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations for Intercontinental Exchange and Westwood Holdings Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intercontinental Exchange	1	2	9	1	2.77
Westwood Holdings Group	0	0	1	0	3.00

Intercontinental Exchange presently has a consensus price target of $182.62, indicating a potential upside of 21.58%. Given Intercontinental Exchange’s higher possible upside, equities research analysts plainly believe Intercontinental Exchange is more favorable than Westwood Holdings Group.

Dividends

Intercontinental Exchange pays an annual dividend of $2.08 per share and has a dividend yield of 1.4%. Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Intercontinental Exchange pays out 29.4% of its earnings in the form of a dividend. Westwood Holdings Group pays out 68.2% 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. Intercontinental Exchange has increased its dividend for 9 consecutive years.

Institutional & Insider Ownership

89.3% of Intercontinental Exchange shares are held by institutional investors. Comparatively, 56.6% of Westwood Holdings Group shares are held by institutional investors. 0.8% of Intercontinental Exchange shares are held by insiders. Comparatively, 17.4% of Westwood Holdings Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Intercontinental Exchange and Westwood Holdings Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intercontinental Exchange	30.08%	14.95%	2.77%
Westwood Holdings Group	7.73%	8.10%	6.59%

Earnings & Valuation

This table compares Intercontinental Exchange and Westwood Holdings Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intercontinental Exchange	$12.64 billion	6.67	$3.31 billion	$7.08	21.21
Westwood Holdings Group	$101.70 million	1.75	$7.06 million	$0.88	21.28

Intercontinental Exchange has higher revenue and earnings than Westwood Holdings Group. Intercontinental Exchange is trading at a lower price-to-earnings ratio than Westwood Holdings Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Intercontinental Exchange has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Westwood Holdings Group has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Summary

Intercontinental Exchange beats Westwood Holdings Group on 13 of the 18 factors compared between the two stocks.

About Intercontinental Exchange

Intercontinental Exchange, Inc., together with its subsidiaries, engages in the provision of market infrastructure, data services, and technology solutions for financial institutions, corporations, and government entities in the United States, the United Kingdom, the European Union, Singapore, India, Abu Dhabi, Israel, and Canada. It operates through three segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology. The company operates regulated marketplaces for listing, trading, and clearing an array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange, and equities, as well as corporate and exchange-traded funds; and trading venues, including regulated exchanges and clearing houses. It also offers energy, agricultural and metals, and financial futures and options; and cash equities and equity options, and over-the-counter and other markets, as well as listings and data and connectivity services. In addition, the company provides fixed income data and analytic, fixed income execution, CDS clearing, and other multi-asset class data and network services. Further, it offers proprietary and comprehensive mortgage origination platform, which serves residential mortgage loans; closing solutions that provides customers connectivity to the mortgage supply chain and facilitates the secure exchange of information; data and analytics services; and Data as a Service for lenders to access data and origination information. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.