MarketAxess Poised For Growth Despite Stiff Competition

On May 12, 2016, we issued an updated research report on MarketAxess Holdings Inc. (NASDAQ:MKTX) .

In first-quarter 2016, the securities exchange provider’s earnings missed the Zacks Consensus Estimate but improved year over year on record revenues. The company witnessed continued strong growth owing to the acceleration of market share gains across all core products. Also, improved U.S. market volumes resulted in record trading volumes.

MarketAxess' revenues and operating earnings per share has grown significantly over the last few years and the first quarter was no exception. The company’s core competencies to strategically capitalize on the market opportunities are expected to boost long-term growth, thereby driving financials.

Further, MarketAxess anticipates organic growth strategies worldwide, a compelling economic market model and a diversified product suite of the highly demanded U.S. high-grade floating rate and other credit bonds to broaden its volumes growth.

MarketAxess maintains a strong liquidity and steady capital position despite cash outlays to enhance operations. Strong liquidity not only mitigates balance sheet risks but also paves the way for accelerated capital deployment. The company also engages in shareholder friendly moves through share buybacks and dividend increases.

Moreover, the company bought back shares worth $1.2 million in the first quarter and is now left with $23.8 million available for repurchase. Also, in Jan 2016, the company approved a dividend hike of 30%.

However, exposure to stiff competition has weighed on the company’s operating results. Also, such competition is anticipated to hamper the company’s growth prospects in future. In addition, consistent rise in total expenses and fluctuating operating margin remain headwinds.

Stocks to Consider

Currently MarketAxess carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the finance sector are Cincinnati Financial Corp. (NASDAQ:CINF) , Markel Corp. (NYSE:MKL) and NMI Holdings, Inc. (NASDAQ:NMIH) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

CINCINNATI FINL (CINF): Free Stock Analysis Report

MARKEL CORP (MKL): Free Stock Analysis Report

NMI HOLDINGS-A (NMIH): Free Stock Analysis Report

MARKETAXESS HLD (MKTX): Free Stock Analysis Report

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