Tradeweb Markets (NASDAQ:TW) and Heidrick & Struggles International (NASDAQ:HSII) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, valuation, earnings and dividends.
Insider & Institutional Ownership
40.6% of Tradeweb Markets shares are held by institutional investors. Comparatively, 89.5% of Heidrick & Struggles International shares are held by institutional investors. 1.2% of Tradeweb Markets shares are held by company insiders. Comparatively, 1.4% of Heidrick & Struggles International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Tradeweb Markets has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Heidrick & Struggles International has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for Tradeweb Markets and Heidrick & Struggles International, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Tradeweb Markets | 0 | 7 | 6 | 0 | 2.46 |
| Heidrick & Struggles International | 0 | 3 | 0 | 0 | 2.00 |
Tradeweb Markets presently has a consensus target price of $61.9545, indicating a potential downside of 4.12%. Heidrick & Struggles International has a consensus target price of $26.00, indicating a potential downside of 20.68%. Given Tradeweb Markets' stronger consensus rating and higher possible upside, research analysts clearly believe Tradeweb Markets is more favorable than Heidrick & Struggles International.
Profitability
This table compares Tradeweb Markets and Heidrick & Struggles International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Tradeweb Markets | 17.80% | 5.82% | 5.19% |
| Heidrick & Struggles International | -5.02% | 11.69% | 4.35% |
Dividends
Tradeweb Markets pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. Heidrick & Struggles International pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Tradeweb Markets pays out 46.4% of its earnings in the form of a dividend. Heidrick & Struggles International pays out 23.2% 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. Heidrick & Struggles International is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Tradeweb Markets and Heidrick & Struggles International's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Tradeweb Markets | $775.57 million | 18.97 | $126.12 million | $0.69 | 93.65 |
| Heidrick & Struggles International | $725.61 million | 0.87 | $46.87 million | $2.59 | 12.66 |
Tradeweb Markets has higher revenue and earnings than Heidrick & Struggles International. Heidrick & Struggles International is trading at a lower price-to-earnings ratio than Tradeweb Markets, indicating that it is currently the more affordable of the two stocks.
Summary
Tradeweb Markets beats Heidrick & Struggles International on 9 of the 16 factors compared between the two stocks.
