CMC Markets vs Interactive Brokers Which Is More Favorable?

CMC Markets and Interactive Brokers are two popular online trading platforms that offer stocks and other financial instruments to investors. While both platforms provide access to a wide range of markets and competitive pricing, there are key differences between the two. CMC Markets is known for its user-friendly interface and educational resources, making it a great option for beginner traders. On the other hand, Interactive Brokers is preferred by more experienced traders for its advanced tools and low commissions. Ultimately, the choice between the two will depend on the individual investor's preferences and trading style.

CMC Markets or Interactive Brokers?

When comparing CMC Markets and Interactive Brokers, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between CMC Markets and Interactive Brokers.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. CMC Markets has a dividend yield of 0.04%, while Interactive Brokers has a dividend yield of 0.47%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CMC Markets reports a 5-year dividend growth of -7.66% year and a payout ratio of 4.17%. On the other hand, Interactive Brokers reports a 5-year dividend growth of 0.00% year and a payout ratio of 10.89%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with CMC Markets P/E ratio at 2.22 and Interactive Brokers's P/E ratio at 27.97. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CMC Markets P/B ratio is 1.81 while Interactive Brokers's P/B ratio is 4.69.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CMC Markets has seen a 5-year revenue growth of 1.86%, while Interactive Brokers's is 0.61%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CMC Markets's ROE at 86.11% and Interactive Brokers's ROE at 18.13%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are £262.50 for CMC Markets and $177.55 for Interactive Brokers. Over the past year, CMC Markets's prices ranged from £94.30 to £349.00, with a yearly change of 270.10%. Interactive Brokers's prices fluctuated between $78.93 and $193.42, with a yearly change of 145.05%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.