Interactive Brokers vs CMC Markets Which Offers More Value?

Interactive Brokers and CMC Markets are both well-established online brokerage firms that offer a wide range of investment tools and products for traders and investors. Interactive Brokers is known for its advanced trading platforms and low commission fees, making it a popular choice for active traders. On the other hand, CMC Markets is known for its user-friendly platform and comprehensive research tools, making it a top choice for beginner investors. Both platforms have their strengths and weaknesses, so it's important to carefully consider which one best suits your investment goals and trading style.

Interactive Brokers or CMC Markets?

When comparing Interactive Brokers and CMC Markets, 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 Interactive Brokers and CMC Markets.

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. Interactive Brokers has a dividend yield of 0.47%, while CMC Markets has a dividend yield of 0.04%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Interactive Brokers reports a 5-year dividend growth of 0.00% year and a payout ratio of 10.89%. On the other hand, CMC Markets reports a 5-year dividend growth of -7.66% year and a payout ratio of 4.17%.

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 Interactive Brokers P/E ratio at 27.97 and CMC Markets's P/E ratio at 2.22. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Interactive Brokers P/B ratio is 4.69 while CMC Markets's P/B ratio is 1.81.

Growth Investors:

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

Retail Investors:

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