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Why You Should Buy MarketAxess Holdings (MKTX) Stock Now
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Shares of MarketAxess Holdings Inc. (MKTX - Free Report) surged 67.2% in a year’s time, significantly outperforming the 27.8% gain for the Zacks categorized Securities Exchanges industry. We see further upside potential for the stock in the near term, given the company’s strength in several areas.
Last month, the company reported fourth-quarter 2016 earnings per share of 88 cents, beating the Zacks Consensus Estimate of 84 cents. Also, the bottom line improved 35.4% from the year-ago quarter. Results of the New York-based operator of fixed-income securities trading platforms were primarily driven by a robust top-line performance.
Why is the Stock an Attractive Pick?
Improving Volumes to Support Revenue: In the recent years, MarketAxess has managed to register decent growth in commissions, which constitute nearly 90% of the company’s total revenue. Commissions grew at a CAGR of 11% over the past three years (2012–2016), primarily driven by rising volumes. Notably, given the rising interest rate environment amid the improving U.S. economy, along with strengthening of the dollar, management expects continued healthy inflows from Europe and Asia in the U.S. credit products.
Earnings Per Share Growth: MarketAxess has witnessed 14% rise in earnings per share (EPS) in the last three years. It remains well positioned for growth on the back of its strong market position. Also, it should continue to benefit from its international business, with strength in both emerging markets and Eurobond spaces. We remain optimistic as the company remains focused on its ongoing investments in Open Trading, protocols and new products to expand the geographic reach and infrastructure. Notably, the company has long-term expected EPS growth rate of 20%.
Steady Capital Deployment Activities: Driven by financial strength, MarketAxess remains committed to boosting shareholders’ value. Notably, dividends and share repurchases totaled $63 million or about 46% of free cash flow in 2016. In Jan 2017, the company raised quarterly cash dividend by 27% to 33 cents per share, marking the increase in the dividends for seven consecutive years. Further, as of Dec 31, 2016, shares of about $51.1 million were available for repurchases under its existing program.
Upward Estimates Revisions: Over the past 30 days, the Zacks Consensus Estimate for the current quarter advanced 3.1% to $1.00. Also, for 2017, it increased 4.1% to $4.09. The positive earnings estimate revisions indicate analysts’ confidence and substantiate the Zacks Rank #1 (Strong Buy) for the stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Walker & Dunlop, Inc. (WD - Free Report) : Over the last 30 days, the Zacks Consensus Estimate for 2017 jumped 20.1% to $3.89. The company sports a Zacks Rank #1.
Essent Group Ltd. (ESNT - Free Report) : The Zacks Consensus Estimate for 2017 climbed 6.7% to $2.88, over the past 30 days and boasts a Zacks Rank #1.
PJT Partners Inc. (PJT - Free Report) : Over the last 30 days, the Zacks Consensus Estimate for 2017 jumped 7.4% to $1.60. The company also flaunts a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
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Why You Should Buy MarketAxess Holdings (MKTX) Stock Now
Shares of MarketAxess Holdings Inc. (MKTX - Free Report) surged 67.2% in a year’s time, significantly outperforming the 27.8% gain for the Zacks categorized Securities Exchanges industry. We see further upside potential for the stock in the near term, given the company’s strength in several areas.
Last month, the company reported fourth-quarter 2016 earnings per share of 88 cents, beating the Zacks Consensus Estimate of 84 cents. Also, the bottom line improved 35.4% from the year-ago quarter. Results of the New York-based operator of fixed-income securities trading platforms were primarily driven by a robust top-line performance.
Why is the Stock an Attractive Pick?
Improving Volumes to Support Revenue: In the recent years, MarketAxess has managed to register decent growth in commissions, which constitute nearly 90% of the company’s total revenue. Commissions grew at a CAGR of 11% over the past three years (2012–2016), primarily driven by rising volumes. Notably, given the rising interest rate environment amid the improving U.S. economy, along with strengthening of the dollar, management expects continued healthy inflows from Europe and Asia in the U.S. credit products.
Earnings Per Share Growth: MarketAxess has witnessed 14% rise in earnings per share (EPS) in the last three years. It remains well positioned for growth on the back of its strong market position. Also, it should continue to benefit from its international business, with strength in both emerging markets and Eurobond spaces. We remain optimistic as the company remains focused on its ongoing investments in Open Trading, protocols and new products to expand the geographic reach and infrastructure. Notably, the company has long-term expected EPS growth rate of 20%.
Steady Capital Deployment Activities: Driven by financial strength, MarketAxess remains committed to boosting shareholders’ value. Notably, dividends and share repurchases totaled $63 million or about 46% of free cash flow in 2016. In Jan 2017, the company raised quarterly cash dividend by 27% to 33 cents per share, marking the increase in the dividends for seven consecutive years. Further, as of Dec 31, 2016, shares of about $51.1 million were available for repurchases under its existing program.
Upward Estimates Revisions: Over the past 30 days, the Zacks Consensus Estimate for the current quarter advanced 3.1% to $1.00. Also, for 2017, it increased 4.1% to $4.09. The positive earnings estimate revisions indicate analysts’ confidence and substantiate the Zacks Rank #1 (Strong Buy) for the stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Walker & Dunlop, Inc. (WD - Free Report) : Over the last 30 days, the Zacks Consensus Estimate for 2017 jumped 20.1% to $3.89. The company sports a Zacks Rank #1.
Essent Group Ltd. (ESNT - Free Report) : The Zacks Consensus Estimate for 2017 climbed 6.7% to $2.88, over the past 30 days and boasts a Zacks Rank #1.
PJT Partners Inc. (PJT - Free Report) : Over the last 30 days, the Zacks Consensus Estimate for 2017 jumped 7.4% to $1.60. The company also flaunts a Zacks Rank #1.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>