Financial Comparison: OTC Markets Group (OTCM) & Its Peers

OTC Markets Group (OTCMKTS: OTCM) is one of 23 public companies in the “Security & commodity brokers, dealers, exchanges & services” industry, but how does it contrast to its peers? We will compare OTC Markets Group to similar businesses based on the strength of its valuation, analyst recommendations, earnings, dividends, risk, profitability and institutional ownership.

Volatility and Risk

OTC Markets Group has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, OTC Markets Group’s peers have a beta of 0.46, indicating that their average share price is 54% less volatile than the S&P 500.

Dividends

OTC Markets Group pays an annual dividend of $0.60 per share and has a dividend yield of 1.6%. OTC Markets Group pays out 48.0% of its earnings in the form of a dividend. As a group, “Security & commodity brokers, dealers, exchanges & services” companies pay a dividend yield of 1.5% and pay out 36.0% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings for OTC Markets Group and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OTC Markets Group 0 0 0 0 N/A
OTC Markets Group Competitors 193 1005 1080 29 2.41

As a group, “Security & commodity brokers, dealers, exchanges & services” companies have a potential downside of 1.55%. Given OTC Markets Group’s peers higher possible upside, analysts clearly believe OTC Markets Group has less favorable growth aspects than its peers.

Valuation & Earnings

This table compares OTC Markets Group and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
OTC Markets Group $60.35 million $14.94 million 30.41
OTC Markets Group Competitors $8.04 billion $638.76 million 29.15

OTC Markets Group’s peers have higher revenue and earnings than OTC Markets Group. OTC Markets Group is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares OTC Markets Group and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OTC Markets Group 24.71% 70.25% 27.16%
OTC Markets Group Competitors 15.87% 20.53% 7.03%

Institutional & Insider Ownership

0.1% of OTC Markets Group shares are held by institutional investors. Comparatively, 72.6% of shares of all “Security & commodity brokers, dealers, exchanges & services” companies are held by institutional investors. 6.1% of shares of all “Security & commodity brokers, dealers, exchanges & services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

OTC Markets Group peers beat OTC Markets Group on 7 of the 12 factors compared.

OTC Markets Group Company Profile

OTC Markets Group Inc. engages in the financial market business in the United States and internationally. It offers OTC Link Alternative Trading System, which provides a suite of quotation and trade-messaging services for broker-dealers to control trades and choice of counterparties for execution and attracting order flow, as well as complying with Financial Industry Regulatory Authority and Securities and Exchange Commission regulations; and OTC Link Electronic Communication Networks (ECN) that acts as an agency intermediary in relation to various transactions executed on the ECN's platform. The company also provides enterprise and market data licenses through direct and extranet connectivity, third party market data redistributors, and order management systems to investors, traders, institutions, and regulators. In addition, it offers a suite of market trading services to companies, such as the OTC Disclosure & News Service for posting financial reports, disclosure documents, and news releases; Real-Time Level 2 Quote Display, a service that companies sponsor to provide their investors with access to real-time level 2 quotes available on otcmarkets.com and the company's Website; and Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws, as well as operates the OTCQX Best Market and OTCQB Venture Market. Further, it offers software, and risk and performance analytics tools for the banking and industries. The company has a strategic alliance with North Capital Investment Technology Inc. to provide companies with access to a technology platform to raise capital online. The company was formerly known as Pink OTC Markets Inc. and changed its name to OTC Markets Group Inc. in January 2011. OTC Markets Group Inc. was founded in 1904 and is headquartered in New York, New York.

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