Critical Review: China Finance Online (JRJC) and TD Ameritrade (AMTD)

China Finance Online (NASDAQ: JRJC) and TD Ameritrade (NASDAQ:AMTD) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Volatility & Risk

China Finance Online has a beta of 2, indicating that its share price is 100% more volatile than the S&P 500. Comparatively, TD Ameritrade has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for China Finance Online and TD Ameritrade, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Finance Online 0 0 0 0 N/A
TD Ameritrade 1 4 12 0 2.65

TD Ameritrade has a consensus target price of $63.56, indicating a potential upside of 4.25%. Given TD Ameritrade’s higher possible upside, analysts plainly believe TD Ameritrade is more favorable than China Finance Online.

Profitability

This table compares China Finance Online and TD Ameritrade’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Finance Online -86.19% -64.41% -29.03%
TD Ameritrade 22.02% 19.66% 3.72%

Earnings and Valuation

This table compares China Finance Online and TD Ameritrade’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Finance Online $42.62 million 1.17 -$36.73 million N/A N/A
TD Ameritrade $3.68 billion 9.41 $872.00 million $1.84 33.14

TD Ameritrade has higher revenue and earnings than China Finance Online.

Insider & Institutional Ownership

2.7% of China Finance Online shares are held by institutional investors. Comparatively, 91.7% of TD Ameritrade shares are held by institutional investors. 0.4% of TD Ameritrade shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

TD Ameritrade pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. China Finance Online does not pay a dividend. TD Ameritrade pays out 45.7% of its earnings in the form of a dividend.

Summary

TD Ameritrade beats China Finance Online on 11 of the 13 factors compared between the two stocks.

About China Finance Online

China Finance Online Co. Limited provides Web-based financial services in the People's Republic of China and Hong Kong. The company operates through three segments: Commodities Brokerage Services; Online Financial Information and Advisory Service, and Other Related Services; and Hong Kong Brokerage Services. It provides online access to securities and commodities trading services, wealth management products, and securities investment advisory services to retail investors; and financial database and analytics to institutional investors, including financial, research, academic, and regulatory institutions, as well as financial software products. The company is involved in the operation of Yinglibao, an Internet-based financial platform that integrates wealth management solutions and mutual fund distribution; Securities Master, an integrated securities trading platform; and Investment Master, a Web-based mobile investment advisory service platform that facilitates securities investment advisors to communicate with their clients and followers. In addition, it provides commodities brokerage services; and securities and futures contracts brokerage, and related services to its customers, who invest in stocks listed on Hong Kong Stock Exchange. The company offers its products and services to individual investors managing their own money; professional investors, such as institutional investors managing large sums of money on behalf of their clients and high net worth individuals; and other financial professionals, including investment bankers, stock analysts and financial reporters, and middle class individuals. China Finance Online Co. Limited has strategic cooperation agreements with CITIC Securities and China Investment Securities Co., Ltd. to develop finance technology for investment advisory and wealth management services. The company was founded in 1998 and is based in Beijing, the People's Republic of China.

About TD Ameritrade

TD Ameritrade Holding Corporation provides securities brokerage and related technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. Its products and services include tdameritrade.com, a Web platform for self-directed retail investors; Trade Architect, a Web-based platform for investors and traders to identify opportunities and stay informed; thinkorswim, a desktop platform for traders; and TD Ameritrade Mobile, which allows on-the-go investors and traders to trade and monitor accounts. The company also offers TD Ameritrade Institutional that provides brokerage and custody services to approximately 6,000 independent RIAs and their clients; TD Ameritrade Education, which allows investor education for stocks, options, income investing, and portfolio management; TD Ameritrade's Goal Planning that offers investment consulting and planning services; Selective Portfolios, an advisory service, which develops portfolios of exchange-traded funds (ETFs) and mutual funds; AdvisorDirect, a national referral service for investors; TD Ameritrade Singapore Pte. Ltd. that enables retail investors in Singapore to trade the U.S. markets; and TD Ameritrade Corporate Services, which provide self-directed brokerage services to employees of corporations. In addition, it offers various retail brokerage products and services, such as common and preferred stocks; ETFs; options; futures; foreign exchange; mutual funds; fixed income products; primary and secondary offerings of fixed income securities, closed-end funds, and preferred stocks; margin lending; cash management services; and annuities. The company provides its services primarily through the Internet, a network of retail branches, mobile trading applications, interactive voice response, and registered representatives through telephone. TD Ameritrade Holding Corporation was founded in 1971 and is headquartered in Omaha, Nebraska.

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