Added to YB: 2022-07-15
Pitch date: 2022-07-14
OTCM [neutral]
OTC Markets Group Inc.
Author Info
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Company Info
OTC Markets Group Inc. operates regulated markets for trading 12,000 U.S. and international securities.
Market Cap
$614.4M
Pitch Price
N/A
Price Target
N/A
Dividend
5.67%
EV/EBITDA
12.93
P/E
19.51
EV/Sales
5.01
Sector
Capital Markets
Category
value
Small cap company with a monopoly position and a growing dividend
OTCM: Platform for OTC market w/ 3 segments: OTC Link (29% rev, trading infrastructure), Market Data (33% rev, sold to Bloomberg/Reuters), Corporate Services (38% rev, listing fees). Capital-light monopoly, 30% net margin, 80-100% ROE, 60% ROIC. Rule 15c2-11 tailwind. 94% retention, pricing power (5-10% annual increases). Returns 90% profits to shareholders: 3.9% dividend yield + buybacks = 4.1% yield. Q4 annualized $36M profit = 18x PE. Est 8% organic growth + 5% yield - 1% dilution = 12% IRR. Risks: cyclicality, volume decline, regulation.
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