Critical Analysis: BGC Partners (BGCP) & Its Peers

BGC Partners (NASDAQ: BGCP) 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 BGC Partners to related companies based on the strength of its risk, dividends, earnings, valuation, profitability, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations for BGC Partners and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BGC Partners 0 1 0 0 2.00
BGC Partners Competitors 193 1000 1074 29 2.41

As a group, “Security & commodity brokers, dealers, exchanges & services” companies have a potential upside of 0.60%. Given BGC Partners’ peers stronger consensus rating and higher probable upside, analysts plainly believe BGC Partners has less favorable growth aspects than its peers.

Dividends

BGC Partners pays an annual dividend of $0.04 per share and has a dividend yield of 1.0%. BGC Partners pays out 6.6% 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.

Profitability

This table compares BGC Partners and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BGC Partners 2.21% 40.10% 6.47%
BGC Partners Competitors 15.87% 20.53% 7.03%

Earnings & Valuation

This table compares BGC Partners and its peers gross revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
BGC Partners $2.10 billion $55.71 million 6.64
BGC Partners Competitors $8.04 billion $638.76 million 28.09

BGC Partners’ peers have higher revenue and earnings than BGC Partners. BGC Partners is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

45.7% of BGC Partners shares are owned by institutional investors. Comparatively, 72.6% of shares of all “Security & commodity brokers, dealers, exchanges & services” companies are owned by institutional investors. 30.5% of BGC Partners shares are owned by company insiders. Comparatively, 6.1% of shares of all “Security & commodity brokers, dealers, exchanges & services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

BGC Partners has a beta of 1.76, suggesting that its share price is 76% more volatile than the S&P 500. Comparatively, BGC Partners’ peers have a beta of 0.46, suggesting that their average share price is 54% less volatile than the S&P 500.

Summary

BGC Partners peers beat BGC Partners on 10 of the 15 factors compared.

About BGC Partners

BGC Partners, Inc. operates as a brokerage and financial technology company in the United States, the United Kingdom, rest of Asia, France, the Middle East, Africa, rest of Europe, and internationally. It offers various brokerage products, such as fixed income, foreign exchange, equities, energy and commodities, insurance, and futures. The company also provides other services that include trade execution, broker dealer, clearing, trade compression, post-trade, information, and other back office services to financial and non-financial institutions. In addition, it offers fully electronic brokerage, financial technology solutions, market data, post-trade services, and analytics related to financial instrument and markets under the Fenics, BGC Trader, CreditMatch, Fenics Market Data, BGC Market Data, kACE2, EMBonds, Capitalab, Swaptioniser, CBID, and Lucera brand names. Further, the company provides screen-based market solutions, which enable its clients to develop a marketplace, trade with their customers, issue debt, trade odd lots, access program trading interfaces, and access its network and intellectual property; software and technology infrastructure for the transactional and technology related elements; and option pricing and analysis tools. It primarily serves banks, broker-dealers, investment banks, trading firms, hedge funds, governments, and corporations, as well as investment firms. BGC Partners, Inc. is headquartered in New York, New York.

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