T. Rowe Price Group (NASDAQ:TROW) versus MarketAxess (NASDAQ:MKTX) Head to Head Survey

T. Rowe Price Group (NASDAQ:TROW) and MarketAxess (NASDAQ:MKTX) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Insider & Institutional Ownership

73.4% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 99.0% of MarketAxess shares are held by institutional investors. 1.6% of T. Rowe Price Group shares are held by insiders. Comparatively, 0.7% of MarketAxess shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for T. Rowe Price Group and MarketAxess, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T. Rowe Price Group	4	9	1	0	1.79
MarketAxess	0	12	1	0	2.08

T. Rowe Price Group presently has a consensus price target of $105.69, suggesting a potential upside of 0.17%. MarketAxess has a consensus price target of $156.10, suggesting a potential downside of 4.93%. Given T. Rowe Price Group’s higher probable upside, equities analysts clearly believe T. Rowe Price Group is more favorable than MarketAxess.

Profitability

This table compares T. Rowe Price Group and MarketAxess’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T. Rowe Price Group	29.26%	20.91%	15.68%
MarketAxess	35.22%	22.48%	12.84%

Risk and Volatility

T. Rowe Price Group has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, MarketAxess has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Dividends

T. Rowe Price Group pays an annual dividend of $5.20 per share and has a dividend yield of 4.9%. MarketAxess pays an annual dividend of $3.12 per share and has a dividend yield of 1.9%. T. Rowe Price Group pays out 52.2% of its earnings in the form of a dividend. MarketAxess pays out 36.8% 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. T. Rowe Price Group has increased its dividend for 39 consecutive years and MarketAxess has increased its dividend for 2 consecutive years. T. Rowe Price Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares T. Rowe Price Group and MarketAxess”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T. Rowe Price Group	$7.59 billion	2.96	$2.09 billion	$9.97	10.58
MarketAxess	$870.02 million	6.64	$246.63 million	$8.48	19.36

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.

Summary

T. Rowe Price Group beats MarketAxess on 9 of the 16 factors compared between the two stocks.

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.

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.