Intercontinental Exchange (NYSE:ICE) & StepStone Group (NASDAQ:STEP) Head-To-Head Contrast

Intercontinental Exchange (NYSE:ICE) and StepStone Group (NASDAQ:STEP) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.

Dividends

Intercontinental Exchange pays an annual dividend of $2.08 per share and has a dividend yield of 1.3%. StepStone Group pays an annual dividend of $1.32 per share and has a dividend yield of 3.1%. Intercontinental Exchange pays out 29.4% of its earnings in the form of a dividend. StepStone Group pays out -17.1% 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. Intercontinental Exchange has raised its dividend for 9 consecutive years and StepStone Group has raised its dividend for 3 consecutive years. StepStone Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

89.3% of Intercontinental Exchange shares are owned by institutional investors. Comparatively, 55.5% of StepStone Group shares are owned by institutional investors. 0.8% of Intercontinental Exchange shares are owned by company insiders. Comparatively, 15.7% of StepStone Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Intercontinental Exchange and StepStone Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intercontinental Exchange	$12.64 billion	7.23	$3.31 billion	$7.08	22.98
StepStone Group	$1.99 billion	2.52	-$535.81 million	($7.72)	-5.45

Intercontinental Exchange has higher revenue and earnings than StepStone Group. StepStone Group is trading at a lower price-to-earnings ratio than Intercontinental Exchange, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Intercontinental Exchange has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, StepStone Group has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares Intercontinental Exchange and StepStone Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intercontinental Exchange	30.08%	14.95%	2.77%
StepStone Group	-30.53%	43.38%	4.40%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Intercontinental Exchange and StepStone Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intercontinental Exchange	1	3	12	1	2.76
StepStone Group	1	2	8	0	2.64

Intercontinental Exchange currently has a consensus target price of $186.31, suggesting a potential upside of 14.49%. StepStone Group has a consensus target price of $67.22, suggesting a potential upside of 59.90%. Given StepStone Group’s higher possible upside, analysts clearly believe StepStone Group is more favorable than Intercontinental Exchange.

Summary

Intercontinental Exchange beats StepStone Group on 11 of the 18 factors compared between the two stocks.

About Intercontinental Exchange

Intercontinental Exchange, Inc., together with its subsidiaries, engages in the provision of market infrastructure, data services, and technology solutions for financial institutions, corporations, and government entities in the United States, the United Kingdom, the European Union, Singapore, India, Abu Dhabi, Israel, and Canada. It operates through three segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology. The company operates regulated marketplaces for listing, trading, and clearing an array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange, and equities, as well as corporate and exchange-traded funds; and trading venues, including regulated exchanges and clearing houses. It also offers energy, agricultural and metals, and financial futures and options; and cash equities and equity options, and over-the-counter and other markets, as well as listings and data and connectivity services. In addition, the company provides fixed income data and analytic, fixed income execution, CDS clearing, and other multi-asset class data and network services. Further, it offers proprietary and comprehensive mortgage origination platform, which serves residential mortgage loans; closing solutions that provides customers connectivity to the mortgage supply chain and facilitates the secure exchange of information; data and analytics services; and Data as a Service for lenders to access data and origination information. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.