TD Ameritrade Holding Corporation (NASDAQ: AMTD) and FBR & Co (NASDAQ:FBRC) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Volatility & Risk

TD Ameritrade Holding Corporation has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, FBR & Co has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares TD Ameritrade Holding Corporation and FBR & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TD Ameritrade Holding Corporation 24.01% 16.09% 2.89%
FBR & Co 3.49% 4.34% 0.49%

Dividends

TD Ameritrade Holding Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. FBR & Co pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. TD Ameritrade Holding Corporation pays out 45.0% of its earnings in the form of a dividend. FBR & Co pays out -8.9% 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. FBR & Co is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for TD Ameritrade Holding Corporation and FBR & Co, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TD Ameritrade Holding Corporation 0 6 9 0 2.60
FBR & Co 0 1 0 0 2.00

TD Ameritrade Holding Corporation currently has a consensus target price of $44.75, suggesting a potential upside of 3.31%. Given TD Ameritrade Holding Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe TD Ameritrade Holding Corporation is more favorable than FBR & Co.

Insider & Institutional Ownership

93.6% of TD Ameritrade Holding Corporation shares are owned by institutional investors. Comparatively, 72.4% of FBR & Co shares are owned by institutional investors. 0.4% of TD Ameritrade Holding Corporation shares are owned by insiders. Comparatively, 13.9% of FBR & Co shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares TD Ameritrade Holding Corporation and FBR & Co’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TD Ameritrade Holding Corporation $3.46 billion 6.61 $845.04 million $1.60 27.07
FBR & Co N/A N/A N/A ($9.00) -1.95

TD Ameritrade Holding Corporation has higher revenue and earnings than FBR & Co. FBR & Co is trading at a lower price-to-earnings ratio than TD Ameritrade Holding Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

TD Ameritrade Holding Corporation beats FBR & Co on 10 of the 13 factors compared between the two stocks.

About TD Ameritrade Holding Corporation

TD Ameritrade Holding Corporation is a provider of securities brokerage services and related technology-based financial services. The Company provides its services to retail investors, traders and independent registered investment advisors (RIAs). The Company provides its services through the Internet, a national branch network and relationships with RIAs. The Company’s products and services include common and preferred stock, exchange-traded funds, options, futures, foreign exchange, mutual funds, fixed income, new and secondary issue securities, margin lending, cash management services and annuities. The Company uses its platform to offer brokerage services to retail investors and investment advisors. In addition, it also offers various products and services to retail clients, such as touch-tone trading, trading over the Internet, real-time quotes, extended trading hours and direct access to market destinations.

About FBR & Co

FBR & Co. is an investment banking and institutional brokerage company. The Company focuses on the equity capital markets. The Company operates through two segments: capital markets, which includes investment banking, institutional brokerage and research, and principal investing. Through its broker-dealer operating subsidiaries, the Company focuses its business on providing: capital raising services, including underwriting and placement of public and private equity, equity-linked and debt securities; financial advisory services, including merger and acquisition (M&A) advisory, restructuring, liability management, recapitalization and strategic alternative analysis; institutional sales and trading services focused on equities, equity-linked securities, listed options, high-yield bonds, senior debt and bank loans, as well as securities lending activities, and differentiated securities research.

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