Critical Analysis: Patria Investments (NYSE:PAX) vs. Deutsche Boerse (OTCMKTS:DBOEY)

Deutsche Boerse (OTCMKTS:DBOEY) and Patria Investments (NYSE:PAX) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Deutsche Boerse and Patria Investments, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Deutsche Boerse	1	2	3	0	2.33
Patria Investments	3	1	1	0	1.60

Patria Investments has a consensus price target of $12.75, indicating a potential upside of 26.74%. Given Patria Investments’ higher possible upside, analysts clearly believe Patria Investments is more favorable than Deutsche Boerse.

Insider and Institutional Ownership

96.3% of Patria Investments shares are owned by institutional investors. 58.1% of Patria Investments shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Deutsche Boerse has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, Patria Investments has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Valuation and Earnings

This table compares Deutsche Boerse and Patria Investments”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Deutsche Boerse	$6.82 billion	8.60	$2.26 billion	$1.36	23.90
Patria Investments	$399.23 million	1.68	$73.40 million	$0.44	22.86

Deutsche Boerse has higher revenue and earnings than Patria Investments. Patria Investments is trading at a lower price-to-earnings ratio than Deutsche Boerse, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Deutsche Boerse and Patria Investments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Deutsche Boerse	33.04%	20.33%	0.64%
Patria Investments	19.91%	38.68%	15.84%

Dividends

Deutsche Boerse pays an annual dividend of $0.29 per share and has a dividend yield of 0.9%. Patria Investments pays an annual dividend of $0.65 per share and has a dividend yield of 6.5%. Deutsche Boerse pays out 21.3% of its earnings in the form of a dividend. Patria Investments pays out 147.7% 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

Deutsche Boerse beats Patria Investments on 9 of the 16 factors compared between the two stocks.

About Deutsche Boerse

Deutsche Börse AG operates as an exchange organization in Europe, America, and the Asia-Pacific. The company operates through four segments: Data & Analytics; Trading & Clearing; Fund Services; and Securities Services. It engages in the trading of derivatives, electricity and gas products, emission rights, foreign exchange, and commodity products; operating EEX and 360T over the counter trading platform for financial instruments, such as foreign exchange, money market, and interest rate products; and operating as a central counterparty. The company also operates in the cash market through Xetra, Börse Frankfurt, and Tradegate trading venues; Qontigo, an integrated suite of front-to-back investment management solution; and a central counterparty for equities and bonds, as well as provides pre-ipo and listing services. In addition, it offers custody and settlement services for securities; investment fund services; connectivity services; and global securities funding and financing, and collateral and liquidity management, as well as secured money, market transaction, and repos and securities lending transaction services. Further, the company provides order routing, settlement, asset management, and custody; investment distribution and placement; infrastructure and post-trading; index, analytics, and risk; securities transactions settlement; securities custody and administration; and market data and analytics services. Additionally, it operates third clearing house Nodal Clear; and specialized software as a service platform for trading participants and digital business platform, as well as offers information technology solutions, including financial market, commodities market, and network connectivity solutions under the Deutsche Börse and 7 Market Technology brands. The company was founded in 1585 and is headquartered in Eschborn, Germany.

About Patria Investments

Patria Investments Limited operates as a private market investment firm focused on investing in Latin America. The company offers asset management services to investors focusing on private equity funds, infrastructure development funds, co-investments funds, constructivist equity funds, and real estate and credit funds. Patria Investments Limited was founded in 1994 and is headquartered in Grand Cayman, the Cayman Islands.