Critical Analysis: Virtu Financial (VIRT) & Oppenheimer (OPY)

Virtu Financial (NASDAQ:VIRT) and Oppenheimer (NYSE:OPY) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Virtu Financial 12.32% 19.85% 3.66%
Oppenheimer 4.27% 7.86% 1.71%

Analyst Recommendations

This is a summary of recent recommendations for Virtu Financial and Oppenheimer, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 0 7 3 0 2.30
Oppenheimer 0 0 0 0 N/A

Virtu Financial currently has a consensus target price of $29.70, suggesting a potential upside of 15.88%. Given Virtu Financial’s higher probable upside, equities research analysts clearly believe Virtu Financial is more favorable than Oppenheimer.

Insider & Institutional Ownership

56.7% of Virtu Financial shares are owned by institutional investors. Comparatively, 47.9% of Oppenheimer shares are owned by institutional investors. 73.5% of Virtu Financial shares are owned by company insiders. Comparatively, 26.9% of Oppenheimer shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Virtu Financial has a beta of -0.95, suggesting that its share price is 195% less volatile than the S&P 500. Comparatively, Oppenheimer has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.

Valuation and Earnings

This table compares Virtu Financial and Oppenheimer’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virtu Financial $1.02 billion 4.74 $2.93 million $0.57 44.96
Oppenheimer $920.34 million 0.41 $22.81 million N/A N/A

Oppenheimer has lower revenue, but higher earnings than Virtu Financial.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 3.7%. Oppenheimer pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Virtu Financial pays out 168.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Virtu Financial beats Oppenheimer on 11 of the 14 factors compared between the two stocks.

Virtu Financial Company Profile

Virtu Financial, Inc. engages in the business of buying and selling of securities and other financial instruments. It offers market making and trading solutions. The company was founded by Vincent Viola in 2008 and is headquartered in New York, NY.

Oppenheimer Company Profile

Oppenheimer Holdings Inc., through its subsidiaries, provides middle-market investment bank and full service broker-dealer products and services. The company offers full-service brokerage services covering exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange-traded options and futures contracts, municipal bonds, mutual funds, and unit investment trusts; financial and wealth planning services; and margin lending services. It also provides asset management services, including separately managed accounts, mutual fund managed accounts, discretionary portfolio management programs, fee-based non-discretionary investment advisory services, alternative investments, portfolio enhancement programs, investment advisory services, and institutional taxable fixed income portfolio management services. In addition, the company offers investment banking services, including strategic advisory services and capital markets products; and institutional equity sales and trading, equity research, equity derivatives and index options, convertible bonds, and event driven sales and trading services. Further, it provides institutional fixed income sales and trading, fixed income research, public finance, and municipal trading services; repurchase agreements and securities lending services; and proprietary trading and investment activities. Additionally, the company offers underwritings, market-making, and trust services. It serves high-net-worth individuals and families, corporate executives, small and mid-sized businesses, institutions and investment advisers, financial sponsors, and domestic and international investors in the Americas, Europe, the Middle East, and Asia. The company was founded in 1881 and is headquartered in New York, New York.

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