FactSet Research Systems (NYSE:FDS) & TMX Group (OTCMKTS:TMXXF) Financial Comparison

FactSet Research Systems (NYSE:FDS) and TMX Group (OTCMKTS:TMXXF) are both financial services 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.

Dividends

FactSet Research Systems pays an annual dividend of $4.16 per share and has a dividend yield of 1.0%. TMX Group pays an annual dividend of $1.60 per share and has a dividend yield of 5.1%. FactSet Research Systems pays out 31.4% of its earnings in the form of a dividend. TMX Group pays out 86.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FactSet Research Systems has increased its dividend for 26 consecutive years.

Profitability

This table compares FactSet Research Systems and TMX Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FactSet Research Systems	23.56%	34.48%	15.17%
TMX Group	N/A	N/A	N/A

Institutional & Insider Ownership

91.2% of FactSet Research Systems shares are held by institutional investors. Comparatively, 7.2% of TMX Group shares are held by institutional investors. 1.0% of FactSet Research Systems 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.

Earnings & Valuation

This table compares FactSet Research Systems and TMX Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FactSet Research Systems	$2.18 billion	7.22	$468.17 million	$13.26	31.17
TMX Group	N/A	N/A	N/A	$1.86	16.92

FactSet Research Systems has higher revenue and earnings than TMX Group. TMX Group is trading at a lower price-to-earnings ratio than FactSet Research Systems, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for FactSet Research Systems and TMX Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FactSet Research Systems	4	8	0	0	1.67
TMX Group	0	0	0	0	N/A

FactSet Research Systems presently has a consensus price target of $432.27, indicating a potential upside of 4.60%. TMX Group has a consensus price target of $30.80, indicating a potential downside of 2.00%. Given FactSet Research Systems’ higher possible upside, equities analysts plainly believe FactSet Research Systems is more favorable than TMX Group.

Summary

FactSet Research Systems beats TMX Group on 11 of the 12 factors compared between the two stocks.

About FactSet Research Systems

FactSet Research Systems Inc., a financial data company, provides integrated financial information and analytical applications to the investment community in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company delivers insight and information through the workflow solutions of research, analytics and trading, content and technology solutions, and wealth. It serves portfolio managers, investment banks, asset managers, wealth advisors, corporate clients, and other financial services entities. FactSet Research Systems Inc. was founded in 1978 and is headquartered in Norwalk, Connecticut.

About TMX Group

TMX Group Limited operates exchanges, markets, and clearinghouses primarily for capital markets in Canada, the United States, the United Kingdom, Germany, and internationally. It operates through four segments: Global Solutions, Insights & Analytics; Capital Formation; Derivatives Trading & Clearing; and Equities and Fixed Income Trading & Clearing. The Global Solutions, Insights & Analytics segment delivers equities and index data, as well as integrated data sets for the proprietary and third party analytics to help clients in making trading and investment decisions; and provides solutions to European and global wholesale energy markets for price discovery, trade execution, post-trade transparency, and straight through processing. The Capital Formation segment operates Toronto Stock Exchange, a national stock exchange for the senior equities market; TSX Venture Exchange, a national stock exchange for the public venture equity market; and TSX Trust that provides corporate trust, registrar, transfer agency, and related services to reporting issuers and private companies. The Derivatives Trading & Clearing segment operates Montreal Exchange, a national derivatives exchange; Canadian Derivatives Clearing Corporation, a clearinghouse for options and futures contracts; BOX, a US equity operations market; and various over-the-counter products and fixed income repurchase agreements. The Equities and Fixed Income Trading & Clearing segment engages in the trading operations of Toronto Stock Exchange, TSX Venture Exchange, and TSX Alpha Exchange; CDS Clearing, an automated facility for the clearing and settlement of equities and fixed income transactions, and custody of securities; and provision of fixed income inter-dealer brokerage services. The company was formerly known as Maple Group Acquisition Corporation and changed its name to TMX Group Limited in August 2012. TMX Group Limited was incorporated in 2011 and is headquartered in Toronto, Canada.