Virtu Financial (NYSE:VIRT – Get Free Report) and Gladstone Investment (NASDAQ:GAIN – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.
Valuation & Earnings
This table compares Virtu Financial and Gladstone Investment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Virtu Financial | $3.63 billion | 2.47 | $468.36 million | $6.02 | 9.61 |
| Gladstone Investment | $99.08 million | 6.37 | $184.75 million | $4.18 | 3.79 |
Risk and Volatility
Virtu Financial has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Gladstone Investment has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Virtu Financial and Gladstone Investment, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Virtu Financial | 1 | 2 | 3 | 1 | 2.57 |
| Gladstone Investment | 0 | 0 | 3 | 1 | 3.25 |
Virtu Financial currently has a consensus target price of $58.80, suggesting a potential upside of 1.61%. Gladstone Investment has a consensus target price of $16.75, suggesting a potential upside of 5.61%. Given Gladstone Investment’s stronger consensus rating and higher possible upside, analysts plainly believe Gladstone Investment is more favorable than Virtu Financial.
Institutional and Insider Ownership
45.8% of Virtu Financial shares are owned by institutional investors. Comparatively, 11.8% of Gladstone Investment shares are owned by institutional investors. 46.8% of Virtu Financial shares are owned by company insiders. Comparatively, 2.2% of Gladstone Investment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares Virtu Financial and Gladstone Investment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Virtu Financial | 13.50% | 49.06% | 4.28% |
| Gladstone Investment | 158.95% | 5.90% | 2.88% |
Dividends
Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 1.7%. Gladstone Investment pays an annual dividend of $0.96 per share and has a dividend yield of 6.1%. Virtu Financial pays out 15.9% of its earnings in the form of a dividend. Gladstone Investment pays out 23.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Summary
Virtu Financial beats Gladstone Investment on 9 of the 15 factors compared between the two stocks.
About Virtu Financial
Virtu Financial, Inc., a financial services company, provides data, analytics, and connectivity products to clients worldwide. The company operates in two segments, Market Making and Execution Services. Its product suite includes offerings in execution, liquidity sourcing, analytics and broker-neutral, and multi-dealer platforms in workflow technology. The company’s solutions enable clients to trade on various venues across countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income, cryptocurrencies, and other commodities. Its analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across markets. Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.
About Gladstone Investment
Gladstone Investment Corporation is business development company, specializes in lower middle market, mature stage, buyouts; refinancing existing debt; senior debt securities such as senior loans, senior term loans, lines of credit, and senior notes; senior subordinated debt securities such as senior subordinated loans and senior subordinated notes; junior subordinated debt securities such as subordinated notes and mezzanine loans; limited liability company interests, and warrants or options. The fund does not invest in start-ups. The fund seeks to invest in manufacturing, consumer products and business/consumer services sector. It seeks to invest in small and mid-sized companies based in the United States. The fund prefers to make debt investments between $5 million and $30 million and equity investments between $10 million and $40 million in companies. The fund seeks to invest in companies with revenue between $20 million and $100 million. The fund invests in companies with EBITDA from $3 million to $20 million. It seeks minority equity ownership and prefers to hold a board seat in its portfolio companies. It also prefers to take majority stake in its portfolio companies. The fund typically holds the investments for seven years and exits via sale or recapitalization, initial public offering, or sale to third party.
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