MarketWise (NASDAQ:MKTW) and TMX Group (OTCMKTS:TMXXF) Financial Comparison

TMX Group (OTCMKTS:TMXXF) and MarketWise (NASDAQ:MKTW) are both financial services companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Profitability

This table compares TMX Group and MarketWise’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TMX Group	N/A	N/A	N/A
MarketWise	0.80%	-1.30%	0.91%

Analyst Recommendations

This is a breakdown of current ratings for TMX Group and MarketWise, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TMX Group	0	0	0	0	N/A
MarketWise	0	1	1	0	2.50

MarketWise has a consensus target price of $2.50, indicating a potential upside of 335.92%. Given MarketWise’s higher probable upside, analysts plainly believe MarketWise is more favorable than TMX Group.

Valuation and Earnings

This table compares TMX Group and MarketWise”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TMX Group	N/A	N/A	N/A	$1.86	17.04
MarketWise	$432.34 million	0.44	$1.78 million	$0.04	14.34

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

Insider & Institutional Ownership

7.2% of TMX Group shares are held by institutional investors. Comparatively, 23.0% of MarketWise shares are held by institutional investors. 28.6% of MarketWise shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

TMX Group pays an annual dividend of $1.60 per share and has a dividend yield of 5.1%. MarketWise pays an annual dividend of $0.04 per share and has a dividend yield of 7.0%. TMX Group pays out 86.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MarketWise pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

MarketWise beats TMX Group on 8 of the 12 factors compared between the two stocks.

About TMX Group

TMX Group Limited operates exchanges, markets, and clearinghouses primarily for capital markets in Canada, the United States, the United Kingdom, Germany, and internationally. It operates through four segments: Global Solutions, Insights & Analytics; Capital Formation; Derivatives Trading & Clearing; and Equities and Fixed Income Trading & Clearing. The Global Solutions, Insights & Analytics segment delivers equities and index data, as well as integrated data sets for the proprietary and third party analytics to help clients in making trading and investment decisions; and provides solutions to European and global wholesale energy markets for price discovery, trade execution, post-trade transparency, and straight through processing. The Capital Formation segment operates Toronto Stock Exchange, a national stock exchange for the senior equities market; TSX Venture Exchange, a national stock exchange for the public venture equity market; and TSX Trust that provides corporate trust, registrar, transfer agency, and related services to reporting issuers and private companies. The Derivatives Trading & Clearing segment operates Montreal Exchange, a national derivatives exchange; Canadian Derivatives Clearing Corporation, a clearinghouse for options and futures contracts; BOX, a US equity operations market; and various over-the-counter products and fixed income repurchase agreements. The Equities and Fixed Income Trading & Clearing segment engages in the trading operations of Toronto Stock Exchange, TSX Venture Exchange, and TSX Alpha Exchange; CDS Clearing, an automated facility for the clearing and settlement of equities and fixed income transactions, and custody of securities; and provision of fixed income inter-dealer brokerage services. The company was formerly known as Maple Group Acquisition Corporation and changed its name to TMX Group Limited in August 2012. TMX Group Limited was incorporated in 2011 and is headquartered in Toronto, Canada.

About MarketWise

MarketWise, Inc. operates a content and technology multi-brand platform for self-directed investors in the United States and Internationally. Its platform includes subscription businesses that provides financial research, software, education, and tools to navigate the financial markets. The company offers various investment strategies, such as value investing, income, growth, commodities, cryptocurrencies, venture, crowdfunded investing, biotechnology, mutual funds, options, and trading; investment research product portfolio through a range of media, including desktops, laptops, tablets, and mobile; and financial newsletters. It provides a suite of stock research tools and portfolio management services under the Chaikin Analytics brand; portfolio management software tools under the TradeSmith brand name; and database of accounting-based financial summaries under the Altimetry brand. In addition, the company develops screeners, monitors, portfolio management tools, and proprietary indicators that produce a composite score to rank publicly traded companies. The company was founded in 1999 and is headquartered in Baltimore, Maryland.