Head to Head Contrast: MarketAxess (NASDAQ:MKTX) & Runway Growth Finance (NASDAQ:RWAY)

Runway Growth Finance (NASDAQ:RWAY) and MarketAxess (NASDAQ:MKTX) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Earnings and Valuation

This table compares Runway Growth Finance and MarketAxess”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Runway Growth Finance	$137.33 million	2.05	$34.05 million	$0.11	60.98
MarketAxess	$870.02 million	6.62	$246.63 million	$8.48	19.31

MarketAxess has higher revenue and earnings than Runway Growth Finance. MarketAxess is trading at a lower price-to-earnings ratio than Runway Growth Finance, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Runway Growth Finance has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, MarketAxess has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.

Profitability

This table compares Runway Growth Finance and MarketAxess’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Runway Growth Finance	5.82%	11.73%	5.55%
MarketAxess	35.22%	22.48%	12.84%

Dividends

Runway Growth Finance pays an annual dividend of $1.32 per share and has a dividend yield of 19.7%. MarketAxess pays an annual dividend of $3.12 per share and has a dividend yield of 1.9%. Runway Growth Finance pays out 1,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MarketAxess pays out 36.8% of its earnings in the form of a dividend. MarketAxess has increased its dividend for 2 consecutive years.

Institutional & Insider Ownership

64.6% of Runway Growth Finance shares are owned by institutional investors. Comparatively, 99.0% of MarketAxess shares are owned by institutional investors. 1.0% of Runway Growth Finance shares are owned by insiders. Comparatively, 0.7% of MarketAxess shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Runway Growth Finance and MarketAxess, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Runway Growth Finance	2	3	2	0	2.00
MarketAxess	0	12	1	0	2.08

Runway Growth Finance currently has a consensus target price of $8.40, indicating a potential upside of 25.22%. MarketAxess has a consensus target price of $156.10, indicating a potential downside of 4.67%. Given Runway Growth Finance’s higher possible upside, analysts plainly believe Runway Growth Finance is more favorable than MarketAxess.

Summary

MarketAxess beats Runway Growth Finance on 12 of the 17 factors compared between the two stocks.

About Runway Growth Finance

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

About MarketAxess

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform for institutional investor and broker-dealer companies worldwide. The company offers trading technology that provides liquidity access in U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, eurobonds, municipal bonds, U.S. government bonds, and other fixed-income securities; and executes bond trades between and among institutional investor and broker-dealer clients in an all-to-all anonymous trading environment for corporate bonds through its Open Trading protocols. It also provides trading-related products and services, including composite+ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments. In addition, the company offers various pre-and post-trade services, such as trade matching, trade publication, regulatory transaction reporting, and market and reference data across a range of fixed-income and other products. MarketAxess Holdings Inc. was incorporated in 2000 and is headquartered in New York, New York.