Global Brokerage (OTCMKTS:GLBR) and LPL Financial (NASDAQ:LPLA) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
This table compares Global Brokerage and LPL Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
LPL Financial pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. Global Brokerage does not pay a dividend. LPL Financial pays out 18.8% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares Global Brokerage and LPL Financial’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Global Brokerage||$284.06 million||0.00||$70.64 million||N/A||N/A|
|LPL Financial||$5.19 billion||1.35||$439.46 million||$5.33||16.23|
LPL Financial has higher revenue and earnings than Global Brokerage.
Institutional and Insider Ownership
96.2% of LPL Financial shares are held by institutional investors. 9.0% of Global Brokerage shares are held by insiders. Comparatively, 2.2% of LPL Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Global Brokerage and LPL Financial, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
LPL Financial has a consensus price target of $91.73, indicating a potential upside of 6.07%. Given LPL Financial’s higher probable upside, analysts clearly believe LPL Financial is more favorable than Global Brokerage.
Risk and Volatility
Global Brokerage has a beta of 4.05, indicating that its stock price is 305% more volatile than the S&P 500. Comparatively, LPL Financial has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.
LPL Financial beats Global Brokerage on 10 of the 13 factors compared between the two stocks.
About Global Brokerage
Global brokerage, Inc., formerly FXCM Inc. (FXCM), is engaged in providing online foreign exchange (FX) trading, contract for difference (CFD) trading, spread betting and related services. The Company owns over 50% of FXCM Group, LLC (FXCM Group). FXCM Group is a holding company of Forex Capital Markets LLC, (FXCM US), Forex Capital Markets Limited, inclusive of all EU branches (FXCM UK), FXCM Australia Pty. Limited, (FXCM AU). The Company focuses on providing global traders with access to market by offering trading tools, hiring trading educators. In addition, FXCM offers educational courses on FX trading and provides trading tools data and resources. FXCM Pro provides retail brokers, small hedge funds and market banks access to wholesale execution and liquidity, as well as providing high and medium frequency funds access to prime brokerage services through FXCM Prime.
About LPL Financial
LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and 529 education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and business development companies. The company also provides fee-based advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers cash sweep programs; and retirement solutions for commission- and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; and trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1968 and is based in Boston, Massachusetts.
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