Emergent Capital (OTCMKTS:EMGCQ) & Virtu Financial (NASDAQ:VIRT) Critical Analysis

Emergent Capital (OTCMKTS:EMGCQ) and Virtu Financial (NASDAQ:VIRT) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Profitability

This table compares Emergent Capital and Virtu Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emergent Capital	N/A	N/A	N/A
Virtu Financial	10.43%	32.08%	3.09%

Valuation and Earnings

This table compares Emergent Capital and Virtu Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emergent Capital	N/A	N/A	N/A	N/A	N/A
Virtu Financial	$3.63 billion	1.68	$276.42 million	$5.13	7.79

Virtu Financial has higher revenue and earnings than Emergent Capital.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Emergent Capital and Virtu Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emergent Capital	0	0	0	0	0.00
Virtu Financial	1	4	2	0	2.14

Virtu Financial has a consensus target price of $43.00, indicating a potential upside of 7.64%. Given Virtu Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Virtu Financial is more favorable than Emergent Capital.

Insider and Institutional Ownership

45.8% of Virtu Financial shares are held by institutional investors. 48.9% of Emergent Capital shares are held by company insiders. Comparatively, 47.2% of Virtu Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Virtu Financial beats Emergent Capital on 8 of the 9 factors compared between the two stocks.

About Emergent Capital

Emergent Capital, Inc., a specialty finance company, invests in life settlements. As of August 31, 2020, it owned a portfolio of 500 life insurance policies. The company was formerly known as Imperial Holdings, Inc. and changed its name to Emergent Capital, Inc. in September 2015. The company was founded in 2006 and is based in Boca Raton, Florida. On October 15, 2020, Emergent Capital, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

About Virtu Financial

Virtu Financial, Inc. operates as a financial services company in the United States, Asia Pacific, Canada, EMEA, Ireland, and internationally. The company operates through two segments, Market Making and Execution Services. Its product includes offerings in execution, liquidity sourcing, analytics and broker-neutral, capital markets, and multi-dealer platforms in workflow technology. The company's product allow its clients to trade on various venues across 50 countries and in various asset classes, including global equities, ETFs, options, foreign exchange, futures, fixed income, cryptocurrencies, and myriad other commodities. Its multi-asset analytics platform provides a range of pre- and post-trade services, data products, and compliance tools for clients to invest, trade, and manage risk across global markets. The company was founded in 2008 and is headquartered in New York, New York.