Why Interactive Brokers Stock Was Moving Higher Today

Shares of the online brokerage rose on a solid first-quarter earnings report.

Shares of Interactive Brokers (IBKR 2.23%) were climbing today after the discount brokerage platform posted better-than-expected results in its first-quarter earnings report.

The company also gave investors a generous dividend hike.

As of 1:23 p.m. ET, the stock was up 3.3%.

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Interactive Brokers delivers solid growth

In a competitive environment in the brokerage industry, Interactive Brokers reported solid growth across the board with revenue up 14% to $1.2 billion, matching expectations.

The company has benefited from higher interest rates as it collected a net interest income of $747 million, up 17% from the quarter a year ago, but non-interest income, which is mostly commissions, continued to grow as well, up 9% to $456 million.

Overall, adjusted earnings per share was up 21% to $1.64, which edged out estimates at $1.63.

In addition to the solid financial results, Interactive Brokers also posted strong results in other key metrics as customer accounts increased 25% to 2.75 million and customer margin loans, a key source of income, rose 30% to $51.2 billion. Total customer equity was also up 36% to $465.9 billion.

What’s next for Interactive Brokers

Rising stock markets tend to be good for the brokerage industries as they attract more money into the market and encourage investors to borrow on margin. Additionally, Interactive Brokers is benefiting from the high interest rate environment as net interest margin expanded from 2.24% to 2.41%.

Interactive Brokers didn’t give guidance, but it did raise its quarterly dividend from $0.10 to $0.25, a sign of confidence from the company.

If the stock market remains healthy and interest rates stay up, Interactive Brokers should continue delivering solid results.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Interactive Brokers Group. The Motley Fool has a disclosure policy.

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