Financial Review: Hong Kong Exchanges and Clearing (HKXCY) versus Its Competitors

Hong Kong Exchanges and Clearing (OTCMKTS:HKXCY) is one of 1,758 public companies in the “Capital Markets” industry, but how does it compare to its competitors? We will compare Hong Kong Exchanges and Clearing to similar companies based on the strength of its earnings, profitability, risk, institutional ownership, analyst recommendations, valuation and dividends.

Dividends

Hong Kong Exchanges and Clearing pays an annual dividend of $1.52 per share and has a dividend yield of 2.9%. Hong Kong Exchanges and Clearing pays out 38.4% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 28.3% of their earnings in the form of a dividend. Hong Kong Exchanges and Clearing lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings and Valuation

This table compares Hong Kong Exchanges and Clearing and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Hong Kong Exchanges and Clearing	N/A	N/A	13.14
Hong Kong Exchanges and Clearing Competitors	$28.46 billion	$396.24 million	19.53

Hong Kong Exchanges and Clearing’s competitors have higher revenue and earnings than Hong Kong Exchanges and Clearing. Hong Kong Exchanges and Clearing is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent recommendations for Hong Kong Exchanges and Clearing and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hong Kong Exchanges and Clearing	0	1	0	0	2.00
Hong Kong Exchanges and Clearing Competitors	5207	19511	21806	598	2.38

As a group, “Capital Markets” companies have a potential upside of 23.94%. Given Hong Kong Exchanges and Clearing’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Hong Kong Exchanges and Clearing has less favorable growth aspects than its competitors.

Profitability

This table compares Hong Kong Exchanges and Clearing and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hong Kong Exchanges and Clearing	N/A	N/A	N/A
Hong Kong Exchanges and Clearing Competitors	2,636.70%	9.93%	3.65%

Institutional & Insider Ownership

0.2% of Hong Kong Exchanges and Clearing shares are held by institutional investors. Comparatively, 30.6% of shares of all “Capital Markets” companies are held by institutional investors. 13.2% of shares of all “Capital Markets” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Hong Kong Exchanges and Clearing competitors beat Hong Kong Exchanges and Clearing on 13 of the 13 factors compared.

About Hong Kong Exchanges and Clearing

Hong Kong Exchanges and Clearing Limited, together with its subsidiaries, owns and operates stock exchanges and futures exchanges, and related clearing houses in Hong Kong, Mainland China, and the United Kingdom. It operates through Cash, Equity and Financial Derivatives, Commodities, and Data and Connectivity segments. The Cash segment covers various equity products traded on the cash market platforms of the Stock Exchange of Hong Kong Limited, the Shanghai Stock Exchange, and the Shenzhen Stock Exchange; clearing, settlement and custodian, listing, depository, and nominee services; and other related activities. The Equity and Financial Derivatives segment provides and maintains trading platforms for a range of equity and financial derivative products, such as stock and equity index futures and options, derivative warrants, callable bull/bear contracts and warrants, and over the counter (OTC) derivatives contracts. The Commodities segment operates an exchange for the trading of base, ferrous, and precious metals futures and options contracts in the United Kingdom; and operates Qianhai Mercantile Exchange Co., Ltd., a commodity trading platform in the Mainland. This segment also covers commodities contracts traded on Futures Exchange. The Data and Connectivity segment offers various services that provides access to the platform and infrastructure, as well as services of BayConnect Technology Company Limited; network, terminal user, data line and software sublicense, and hosting services; and sells market data relating to the Hong Kong cash and derivatives markets. The company serves issuers and investors. Hong Kong Exchanges and Clearing Limited was incorporated in 1999 and is based in Central, Hong Kong.