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Cboe Global (CBOE) Rewards Shareholders With 4.2% Dividend Hike

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Cboe Global Markets’ (CBOE - Free Report) board of directors has approved a 4.2% hike in its quarterly dividend to return more profits to stockholders. This marked the 12th straight year of dividend hike. This Zacks Rank #3 (Hold) securities and exchanges stock will pay out 50 cents per share compared with 48 cents per share paid in May 2022.

Based on the stock’s Aug 18 closing price of $126.32, the new dividend will yield 1.5%, better than the industry average of 1.4%. This makes Cboe Global an attractive pick for yield-seeking investors. Shareholders of record on Aug 31 will receive the increased dividend on Sep 15.

Cboe Global enjoys a 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. As of Jun 30, 2022, Cboe Global had cash and cash equivalents of $373.3 million, which increased 9.2% from the figure at 2021 end. Cash flow from operations was $625.4 million in the first half of 2022.

Cboe Global’s dividend witnessed an eight-year (2015-2022) CAGR of 11.5%.
Return on equity (ROE), a profitability measure of how efficiently a company utilizes its shareholders money, is 20% in the trailing twelve months, up 330 basis points year over year and better than the industry average of 11.3%.

Besides regular dividend hike, Cboe Global, one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading, remains committed to returning excess cash to shareholders also through share repurchases.  In the second quarter, Cboe Global returned $67 million to shareholders, comprising $51 million in dividend payments and $16 million in share repurchases.

From the inception of the program in 2011 through Jun 30, 2022, the company repurchased shares for $1.3 billion. As of Jun 30, 2022, the company had $233.3 million of availability remaining under its existing share repurchase authorizations.

Shares of Cboe Global have lost 2.6% in the past year compared with the industry’s decrease of 18%. Expanding product lines across asset classes, broadening geographic reach, diversifying business mix with recurring revenues and leveraging technology should help the stock to trend higher.

Zacks Investment Research
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Stocks to Consider

Some better-ranked stocks from the finance sector include Arch Capital Group Ltd. (ACGL - Free Report) , American Financial Group, Inc. (AFG - Free Report) and ProAssurance Corporation (PRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 13.6%.

The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.

American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has gained 0.6%.

The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 2.2% and 3.3% north, respectively, in the past seven days.

The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 7.3%.

The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 16.9% and 13.9% north, respectively, in the past seven days.

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