SPDR Gold Shares (NYSE:GLD) and Gain Capital (NYSE:GCAP) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Volatility and Risk

SPDR Gold Shares has a beta of 0.09, indicating that its share price is 91% less volatile than the S&P 500. Comparatively, Gain Capital has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Earnings and Valuation

This table compares SPDR Gold Shares and Gain Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SPDR Gold Shares N/A N/A N/A N/A N/A
Gain Capital $233.90 million 0.98 -$60.76 million ($0.95) -6.36

SPDR Gold Shares has higher earnings, but lower revenue than Gain Capital.

Profitability

This table compares SPDR Gold Shares and Gain Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SPDR Gold Shares N/A N/A N/A
Gain Capital 14.34% 31.81% 6.45%

Insider and Institutional Ownership

39.3% of SPDR Gold Shares shares are owned by institutional investors. Comparatively, 44.6% of Gain Capital shares are owned by institutional investors. 9.0% of Gain Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for SPDR Gold Shares and Gain Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SPDR Gold Shares 0 0 0 0 N/A
Gain Capital 0 2 0 0 2.00

Gain Capital has a consensus target price of $6.00, indicating a potential downside of 0.66%. Given Gain Capital’s higher possible upside, analysts clearly believe Gain Capital is more favorable than SPDR Gold Shares.

Summary

Gain Capital beats SPDR Gold Shares on 7 of the 8 factors compared between the two stocks.

About SPDR Gold Shares

Street Tracks Gold Shares offer investors a new, innovative, relatively cost efficient and secure way to access the gold market. Gold Shares are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, & to buy and sell that interest through the trading of a security on a regulated stock exchange. The introduction of Gold Shares is intended to lower many of the barriers, such as access, custody, and transaction costs, that have prevented some investors from investing in gold. Gold Shares represent fractional, undivided beneficial ownership interests in the Trust, the sole assets of which are gold bullion, from time to time, cash. Gold Shares are intended to lower a large number of the barriers preventing investors from using gold as an asset allocation and trading tool. These barriers have included the logistics of buying, storing & insuring gold.

About Gain Capital

GAIN Capital Holdings, Inc., together with its subsidiary, provides trading services and solutions to retail, institutional, and futures service customers worldwide. The company operates in two segments, Retail and Futures. It specializes in over-the-counter (OTC) and exchange-traded markets. The company offers access to a range of financial products, including spot foreign exchange (forex) and precious metals trading; and spread bets and contracts for differences on currencies, commodities, indices, individual equities, bonds, options, and interest rate products, as well as OTC options on forex. It provides services to retail customers through FOREX.com and Cityindex.com, as well as through brokers and white label partners. The company offers execution and risk management services for exchange-traded futures and futures options on the United States and European futures and options exchanges; and online trading services. GAIN Capital Holdings, Inc. was founded in 1999 and is headquartered in Bedminster, New Jersey.

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