Hargreaves Lansdown vs Interactive Brokers Which Is Superior?

Hargreaves Lansdown and Interactive Brokers are two popular options for investors looking to trade stocks. Hargreaves Lansdown is a UK-based platform known for its user-friendly interface and extensive range of investment options. Interactive Brokers, on the other hand, is a US-based platform that offers advanced trading tools and low fees. Both platforms have their own strengths and weaknesses, so it's important for investors to carefully consider their individual needs and preferences before choosing the best option for their investment goals.

Hargreaves Lansdown or Interactive Brokers?

When comparing Hargreaves Lansdown 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 Hargreaves Lansdown 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. Hargreaves Lansdown has a dividend yield of 4.3%, 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. Hargreaves Lansdown reports a 5-year dividend growth of 0.00% year and a payout ratio of 31.52%. 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 Hargreaves Lansdown P/E ratio at 7.82 and Interactive Brokers's P/E ratio at 28.09. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Hargreaves Lansdown P/B ratio is 6.06 while Interactive Brokers's P/B ratio is 4.71.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Hargreaves Lansdown has seen a 5-year revenue growth of 0.64%, while Interactive Brokers's is 0.61%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Hargreaves Lansdown's ROE at 82.68% 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 $13.15 for Hargreaves Lansdown and $179.17 for Interactive Brokers. Over the past year, Hargreaves Lansdown's prices ranged from $8.63 to $15.13, with a yearly change of 75.32%. 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.