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CME Group (CME) Gains 8% YTD: Can it Maintain the Upside?
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Shares of CME Group (CME - Free Report) have gained 8% year to date against the industry’s decrease of 5.7% and the Finance sector’s decrease of 0.6%. The S&P 500 composite index has lost 5.1% in the said time frame. With a market capitalization of $88.7 billion, the average volume of shares traded in the last three months was 1.7 million.
Compelling derivative product lines, global presence, a growing proportion of volume from customers outside the United States, focus on over-the-counter clearing services and effective capital deployment continue to drive CME.
CME Group has a decent surprise history, beating earnings estimates in the last five quarters.
Image Source: Zacks Investment Research
Can CME Stock Retain the Momentum?
The Zacks Consensus Estimate for 2022 earnings is pegged at $7.51, indicating a year-over-year improvement of 12.6% on 5.2% higher revenues of $4.9 billion. The consensus estimate for 2023 earnings is pegged at $8.02, which indicates a year-over-year improvement of 6.7% on 5.8% higher revenues of $5.2 billion. The expected long-term earnings growth rate is pegged at 7.2%.
The consensus estimate for 2022 and 2023 earnings has moved 0.3% and 0.1% north in the past 60 days, reflecting analysts’ optimism.
CME Group’s compelling portfolio, driving higher clearing and transaction fees, market data and information services and other revenues should continue to fuel the top line. Non-transaction-related opportunities, over-the-counter offerings and options business should continue to fuel growth.
CME Group is poised to benefit from the increased adoption of a greater number of crypto assets with increased interest across the entire crypto-economy.
Increased volatility driving improved volumes should increase clearing and transaction fees for CME.
This Zacks Rank #3 (Hold) largest futures exchange in the world, in terms of trading volume as well as notional value traded, boasts a solid market presence with a 90% market share of the global futures trading and clearing services. Increasing electronic trading volume adds scalability and hence leverage to CME Group’s operating model.
A strong liquidity position, supported by solid cash and marketable securities, lends financial flexibility. This in turn should continue to support investments in several growth initiatives, including organic market data growth and new product extensions and offerings.
Solid Dividend History
Banking on solid cash flow, CME Group has increased dividends at a five-year CAGR (2018-2022) of 8.7%. The dividend yield is 1.6%, better than the industry average of 1.1%, making the stock an attractive pick for yield-seeking investors.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 14.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 38.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 24.2%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.
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CME Group (CME) Gains 8% YTD: Can it Maintain the Upside?
Shares of CME Group (CME - Free Report) have gained 8% year to date against the industry’s decrease of 5.7% and the Finance sector’s decrease of 0.6%. The S&P 500 composite index has lost 5.1% in the said time frame. With a market capitalization of $88.7 billion, the average volume of shares traded in the last three months was 1.7 million.
Compelling derivative product lines, global presence, a growing proportion of volume from customers outside the United States, focus on over-the-counter clearing services and effective capital deployment continue to drive CME.
CME Group has a decent surprise history, beating earnings estimates in the last five quarters.
Image Source: Zacks Investment Research
Can CME Stock Retain the Momentum?
The Zacks Consensus Estimate for 2022 earnings is pegged at $7.51, indicating a year-over-year improvement of 12.6% on 5.2% higher revenues of $4.9 billion. The consensus estimate for 2023 earnings is pegged at $8.02, which indicates a year-over-year improvement of 6.7% on 5.8% higher revenues of $5.2 billion. The expected long-term earnings growth rate is pegged at 7.2%.
The consensus estimate for 2022 and 2023 earnings has moved 0.3% and 0.1% north in the past 60 days, reflecting analysts’ optimism.
CME Group’s compelling portfolio, driving higher clearing and transaction fees, market data and information services and other revenues should continue to fuel the top line. Non-transaction-related opportunities, over-the-counter offerings and options business should continue to fuel growth.
CME Group is poised to benefit from the increased adoption of a greater number of crypto assets with increased interest across the entire crypto-economy.
Increased volatility driving improved volumes should increase clearing and transaction fees for CME.
This Zacks Rank #3 (Hold) largest futures exchange in the world, in terms of trading volume as well as notional value traded, boasts a solid market presence with a 90% market share of the global futures trading and clearing services. Increasing electronic trading volume adds scalability and hence leverage to CME Group’s operating model.
A strong liquidity position, supported by solid cash and marketable securities, lends financial flexibility. This in turn should continue to support investments in several growth initiatives, including organic market data growth and new product extensions and offerings.
Solid Dividend History
Banking on solid cash flow, CME Group has increased dividends at a five-year CAGR (2018-2022) of 8.7%. The dividend yield is 1.6%, better than the industry average of 1.1%, making the stock an attractive pick for yield-seeking investors.
Stocks to Consider
Some better-ranked stocks from the finance sector are United Fire Group, Inc. (UFCS - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . United Fire currently sports a Zacks Rank #1 (Strong Buy), whereas Kinsale Capital and Cincinnati Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 14.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 38.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 24.2%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.