Interactive Brokers Group (NASDAQ:IBKR) and Wisdom Tree Investments (NASDAQ:WETF) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.
Volatility and Risk
Interactive Brokers Group has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Wisdom Tree Investments has a beta of 2.47, suggesting that its share price is 147% more volatile than the S&P 500.
This table compares Interactive Brokers Group and Wisdom Tree Investments’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Interactive Brokers Group||5.19%||2.29%||0.25%|
|Wisdom Tree Investments||13.54%||16.31%||9.27%|
Earnings and Valuation
This table compares Interactive Brokers Group and Wisdom Tree Investments’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Interactive Brokers Group||$1.93 billion||11.99||$76.00 million||$1.53||36.51|
|Wisdom Tree Investments||$237.40 million||5.20||$27.19 million||$0.24||33.58|
Interactive Brokers Group has higher revenue and earnings than Wisdom Tree Investments. Wisdom Tree Investments is trading at a lower price-to-earnings ratio than Interactive Brokers Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Interactive Brokers Group and Wisdom Tree Investments, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Interactive Brokers Group||2||1||3||0||2.17|
|Wisdom Tree Investments||3||3||3||0||2.00|
Interactive Brokers Group currently has a consensus price target of $69.33, indicating a potential upside of 24.12%. Wisdom Tree Investments has a consensus price target of $10.78, indicating a potential upside of 33.72%. Given Wisdom Tree Investments’ higher probable upside, analysts plainly believe Wisdom Tree Investments is more favorable than Interactive Brokers Group.
Institutional & Insider Ownership
14.8% of Interactive Brokers Group shares are held by institutional investors. Comparatively, 71.4% of Wisdom Tree Investments shares are held by institutional investors. 2.0% of Interactive Brokers Group shares are held by insiders. Comparatively, 14.5% of Wisdom Tree Investments shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Interactive Brokers Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Wisdom Tree Investments pays an annual dividend of $0.12 per share and has a dividend yield of 1.5%. Interactive Brokers Group pays out 26.1% of its earnings in the form of a dividend. Wisdom Tree Investments pays out 50.0% 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.
Wisdom Tree Investments beats Interactive Brokers Group on 8 of the 15 factors compared between the two stocks.
About Interactive Brokers Group
Interactive Brokers Group, Inc. operates as an automated electronic broker in approximately 120 electronic exchanges and market centers worldwide. It specializes in executing and clearing trades in securities, futures, foreign exchange instruments, bonds, and mutual funds. The company custodies and services accounts for hedge and mutual funds, registered investment advisors, proprietary trading groups, introducing brokers, and individual investors. It offers custody, prime brokerage, securities, and margin lending services. The company provides electronic execution and clearing services. Interactive Brokers Group, Inc. was founded in 1977 and is headquartered in Greenwich, Connecticut.
About Wisdom Tree Investments
WisdomTree Investments, Inc., through its subsidiaries, operates as an exchange-traded funds (ETFs) sponsor and asset manager. It offers ETFs in equities, currency, fixed income, and alternatives asset classes. The company also licenses its indexes to third parties for proprietary products, as well as offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. It develops index using its fundamentally weighted index methodology. In addition, the company provides investment advisory services. The company was founded in 1985 and is based in New York, New York.
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