Analyzing FXCM (NASDAQ:GLBR) and BGC Partners (BGCP)

BGC Partners (NASDAQ: BGCP) and FXCM (NASDAQ:GLBR) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

This table compares BGC Partners and FXCM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BGC Partners 4.23% 35.60% 8.90%
FXCM -30.72% -81.10% -0.73%

Dividends

BGC Partners pays an annual dividend of $0.72 per share and has a dividend yield of 5.8%. FXCM does not pay a dividend. BGC Partners pays out 180.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings and price targets for BGC Partners and FXCM, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BGC Partners 0 0 0 0 N/A
FXCM 0 0 0 0 N/A

Risk and Volatility

BGC Partners has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, FXCM has a beta of -0.08, meaning that its stock price is 108% less volatile than the S&P 500.

Earnings & Valuation

This table compares BGC Partners and FXCM’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BGC Partners $2.70 billion 1.32 $114.36 million $0.40 31.18
FXCM $270.43 million 0.04 $17.84 million ($1.13) -1.68

BGC Partners has higher revenue and earnings than FXCM. FXCM is trading at a lower price-to-earnings ratio than BGC Partners, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

45.9% of BGC Partners shares are held by institutional investors. Comparatively, 24.1% of FXCM shares are held by institutional investors. 37.4% of BGC Partners shares are held by insiders. Comparatively, 9.0% of FXCM shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

BGC Partners beats FXCM on 12 of the 13 factors compared between the two stocks.

BGC Partners Company Profile

BGC Partners, Inc. (BGC) is a global brokerage company servicing the financial and real estate markets. The Company operates through two segments: Financial Services and Real Estate Services. It provides a range of services, including trade execution, broker-dealer services clearing, trade compression, post trade, information, and other back-office services to a range of financial and non-financial institutions. Its integrated platform is designed to provide flexibility to customers with regard to price discovery, execution and processing of transactions, and enables them to use voice, hybrid, or in various markets, electronic brokerage services in connection with transactions executed either over-the-counter or through an exchange. Through the Company’s FENICS, Lucera, BGC Trader, BGC Market Data and Capitalab brands, it offers electronic brokerage, financial technology solutions, market data, post-trade services, and analytics related to select financial instruments and markets.

FXCM Company Profile

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.

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