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Cboe Global (CBOE) to Share More Profits, Ups Dividend by 17%

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In its concerted efforts to enhance shareholder value, the board of directors of Cboe Global Markets (CBOE - Free Report) approved a 17% hike in its dividend. This marked the 10th straight year of dividend hike. With this, the payout now stands at 42 cents per share compared with the earlier payout of 36 cents per share.

Based on the stock’s Aug 14 closing price of $88.23, the new dividend will yield 1.9%, better than the industry average of 1.5%. This makes Cboe Global an attractive pick for yield-seeking investors.

Cboe Global Markets enjoys strong liquidity position despite cash outlays to enhance operating leverage. Strong liquidity not only mitigates balance sheet risks but also paves the way for an accelerated capital deployment. The company’s dividend witnessed a 10-year CAGR of 13.3%.

Besides regular dividend hike, Cboe Global Markets, one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading, also buys back shares. In June 2020, the board of directors increased its buyback authorization by $250 million. As of Jun 30, 2020, the company had $330 million remaining under its existing share repurchase authorization.

Shares of Cboe Global have rallied 26.5% year to date compared with the industry’s increase of 2.4%. Expanding product line across asset classes, broadening geographic reach, diversifying business mix with recurring revenues and leveraging technology should help shares bounce back.


 

Cboe Global currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Some better-ranked stocks from the finance sector include MarketAxess Holdings (MKTX - Free Report) , Assurant (AIZ - Free Report) and Old Republic International (ORI - Free Report) , each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MarketAxess delivered an earnings surprise of 3.29% in the last reported quarter.

Assurant delivered an earnings surprise of 23.32% in the last reported quarter.

Old Republic delivered an earnings surprise of 20.0% in the last reported quarter.

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