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

Profitability

This table compares Virtu Financial and TD Ameritrade’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virtu Financial 7.56% 19.13% 3.57%
TD Ameritrade 34.94% 26.73% 5.78%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Virtu Financial and TD Ameritrade, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 0 3 4 0 2.57
TD Ameritrade 0 5 8 0 2.62

Virtu Financial currently has a consensus target price of $27.57, indicating a potential upside of 16.24%. TD Ameritrade has a consensus target price of $62.63, indicating a potential upside of 19.24%. Given TD Ameritrade’s stronger consensus rating and higher possible upside, analysts clearly believe TD Ameritrade is more favorable than Virtu Financial.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 4.0%. TD Ameritrade pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Virtu Financial pays out 49.0% of its earnings in the form of a dividend. TD Ameritrade pays out 35.9% 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. TD Ameritrade has raised its dividend for 9 consecutive years.

Earnings & Valuation

This table compares Virtu Financial and TD Ameritrade’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virtu Financial $1.88 billion 2.40 $289.44 million $1.96 12.10
TD Ameritrade $5.45 billion 5.33 $1.47 billion $3.34 15.72

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

Risk and Volatility

Virtu Financial has a beta of -0.71, meaning that its stock price is 171% less volatile than the S&P 500. Comparatively, TD Ameritrade has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500.

Insider & Institutional Ownership

55.9% of Virtu Financial shares are owned by institutional investors. Comparatively, 92.9% of TD Ameritrade shares are owned by institutional investors. 63.7% of Virtu Financial shares are owned by company insiders. Comparatively, 0.4% of TD Ameritrade shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

TD Ameritrade beats Virtu Financial on 15 of the 17 factors compared between the two stocks.

About Virtu Financial

Virtu Financial, Inc., together with its subsidiaries, provides market making and liquidity services through its proprietary, multi-asset, and multi-currency technology platform to the financial markets worldwide. The company's Market Making segment principally consists of market making in the cash, futures, and options markets across equities, options, fixed income, currencies, and commodities. Its Execution Services segment comprises agency-based trading and trading venues, which offer execution services in equities, ETFs, futures, and fixed income to institutions, banks, and broker dealers. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

About TD Ameritrade

TD Ameritrade Holding Corporation provides securities brokerage and related technology-based financial services to retail investors and traders, and independent registered investment advisors (RIAs) in the United States. It offers trade execution, clearing, and margin lending services; futures and foreign exchange trade execution services; and trustee, custodial, and other trust-related services to retirement plans and other custodial accounts, as well as provides cash sweep and deposit account products through third-party relationships. The company offers retail brokerage services for common and preferred stocks; exchange-traded funds (ETFs); options; futures; foreign exchange; mutual funds; fixed income products; primary and secondary offerings of fixed income securities, closed-end funds, and preferred stocks; margin lending; cash management services; and annuities. It operates tdameritrade.com, a Web platform for self-directed retail investors; thinkorswim, a desktop platform for traders; and TD Ameritrade Mobile, which allows on-the-go investors and traders to trade and monitor accounts from Web-enabled mobile devices. The company also offers investor education services for stocks, options, income investing, and portfolio management; AdvisorDirect, a national referral service for investors; real-time market news, insights, and investor education services; and self-directed brokerage services to employees of corporations. TD Ameritrade Holding Corporation provides its services primarily through the Internet, a network of retail branches, mobile trading applications, interactive voice response, and registered representatives through telephone. The company was founded in 1971 and is headquartered in Omaha, Nebraska.

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