Analyzing Investment Technology Group (ITG) and Houlihan Lokey (HLI)
Investment Technology Group (NYSE: ITG) and Houlihan Lokey (NYSE:HLI) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.
Earnings and Valuation
This table compares Investment Technology Group and Houlihan Lokey’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Investment Technology Group||$464.03 million||1.44||-$8.61 million||($0.26)||-77.35|
|Houlihan Lokey||$907.54 million||2.67||$128.48 million||$1.92||18.86|
Houlihan Lokey has higher revenue and earnings than Investment Technology Group. Investment Technology Group is trading at a lower price-to-earnings ratio than Houlihan Lokey, indicating that it is currently the more affordable of the two stocks.
This table compares Investment Technology Group and Houlihan Lokey’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Investment Technology Group||-1.77%||3.08%||1.42%|
Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Houlihan Lokey pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Investment Technology Group pays out -107.7% of its earnings in the form of a dividend. Houlihan Lokey pays out 41.7% 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.
Insider & Institutional Ownership
87.6% of Investment Technology Group shares are held by institutional investors. Comparatively, 32.2% of Houlihan Lokey shares are held by institutional investors. 2.4% of Investment Technology Group shares are held by company insiders. Comparatively, 69.7% of Houlihan Lokey shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility and Risk
Investment Technology Group has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Houlihan Lokey has a beta of 0.31, indicating that its stock price is 69% less volatile than the S&P 500.
This is a summary of current recommendations and price targets for Investment Technology Group and Houlihan Lokey, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Investment Technology Group||0||0||1||0||3.00|
Investment Technology Group currently has a consensus target price of $20.00, suggesting a potential downside of 0.55%. Houlihan Lokey has a consensus target price of $38.00, suggesting a potential upside of 4.94%. Given Houlihan Lokey’s higher possible upside, analysts plainly believe Houlihan Lokey is more favorable than Investment Technology Group.
Houlihan Lokey beats Investment Technology Group on 11 of the 16 factors compared between the two stocks.
About Investment Technology Group
Investment Technology Group, Inc. (ITG) is a financial technology company that helps brokers and asset managers improve returns for investors around the world. The Company operates through four segments: U.S. Operations, Canadian Operations, European Operations and Asia Pacific Operations. These four segments provide categories of products and services, such as Execution Services, Workflow Technology and Analytics. Execution Services includes self-directed trading using algorithms, smart routing and matching through POSIT in cash equities, futures and options trading and portfolio trading and high-touch trading desks providing execution expertise. Workflow Technology includes trade order and execution management software applications in addition to network connectivity. Analytics includes tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance; portfolio construction and optimization decisions, and securities valuation.
About Houlihan Lokey
Houlihan Lokey, Inc. is a global independent investment bank that focuses on mergers and acquisitions (M&A), capital markets, financial restructuring, valuation, and strategic consulting. The Company operates through four segments: Corporate Finance, Financial Restructuring, Financial Advisory Services and Strategic Consulting. The Company provides financial professionals with an integrated platform that enables them to deliver advice to its clients. The Corporate Finance activities include two categories: M&A and capital markets advisory. The Financial Advisory Services segment includes financial opinions, and a range of valuation and financial consulting services in the United States. The Financial Restructuring segment provides advice to debtors and creditors. The Strategic Consulting segment thinks beyond traditional business models to help companies compete in new ways and exploit opportunities to achieve profitable growth.
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