MarketAxess Holdings Inc. (MKTX) is a leading institutional electronic trading platform delivering expanded liquidity opportunities, improved execution quality, and significant cost savings across global fixed income markets. It has a network of more than 1,800 institutional investor and dealer firms using its global marketplace.
The company generated 91% of its revenue from commissions along with 5% from information services and 4% from post-trade services during the fourth quarter of 2020. Revenue from commissions is further divided into transaction fees (82%) and distribution fees (18%) with trading volume divided evenly between U.S. high-grade credit and other credit.
Management is continuing to grow through geographic expansion, trading automation, new trading protocols, and the ongoing transition to self-clearing.
Trading Volumes Continue to Rise
MarketAxess reported revenue that rose 32% to $171.3 million, beating consensus estimates by $3.27 million, along with GAAP earnings of $1.91 per share, beating consensus estimates by nine cents. These growth rates were driven by a significant increase in trading volume, which drove higher commission revenue over time.
The company raised its quarterly dividend by 10% to $0.66 per share, which represents a nearly 0.5% forward yield. The dividend is payable on February 24, 2021 to shareholders on record as of February 10, 2021.
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