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Reasons Why CME Group (CME) Stock is an Attractive Pick
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CME GroupInc. (CME - Free Report) has been gaining momentum due to its strong global presence, diverse derivative product lines and solid liquidity.
Growth Projections
The Zacks Consensus Estimate for CME Group’s 2023 earnings is pegged at $8.46, indicating a 6.1% increase from the year-ago reported figure on 3.7% higher revenues of $5.21 billion.
The consensus estimate for 2024 earnings stands at $8.69, indicating a 2.8% increase from the year-ago reported figure on 4.4% higher revenues of $5.44 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 2.6% and 2.1% north, respectively, in the past 60 days. This reflects analysts’ optimism.
Earnings Surprise History
CME Group has a decent earnings surprise history. It has a solid track record of beating earnings estimates in each of the last six quarters.
Zacks Rank & Price Performance
CME Group currently carries a Zacks Rank #2 (Buy). Year to date, the stock has risen 14.6%, outperforming the industry’s increase of 10.7%.
Image Source: Zacks Investment Research
Business Tailwinds
CME Group has a solid market presence with a 90% market share of the global future trading and clearing services. The increasing electronic trading volume adds scalability and leverage to CME Group’s operating model.
Its clearing and transaction fees should continue to benefit from higher trading volumes, which are driven by increased volatility. The increased adoption of a greater number of crypto assets with increased interest across the entire crypto economy should add to the upside. Higher non-transactional revenues should boost the top line as well.
Banking on operational excellence, CME Group has a solid balance sheet and financial flexibility. These support strategic growth initiatives, including organic market data growth and new product extensions and offerings.
CME Group has an impressive dividend history. With the latest 10% increase in February 2023, the company has grown its dividend at a five-year CAGR of 8%. The dividend yield is 2.5%, better than the industry average of 1.5%, making the stock an attractive pick for yield-seeking investors.
PennantPark’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the same in one, the average beat being 0.06%. Year to date, PFLT has dropped 3.1%.
The Zacks Consensus Estimate for PennantPark’s 2023 earnings indicates 5.9% year-over-year growth.
Portman Ridge Finance’s earnings surpassed the Zacks Consensus Estimate in one of the last four quarters and missed in the other three, the average beat being 4.75%. Year to date, PTMN has declined 10.8%.
The Zacks Consensus Estimate for Portman Ridge Finance’s 2023 earnings indicates 4% year-over-year growth.
AssetMark Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 7.95%. Year to date, AssetMark Financial has rallied 32.6%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.
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Reasons Why CME Group (CME) Stock is an Attractive Pick
CME Group Inc. (CME - Free Report) has been gaining momentum due to its strong global presence, diverse derivative product lines and solid liquidity.
Growth Projections
The Zacks Consensus Estimate for CME Group’s 2023 earnings is pegged at $8.46, indicating a 6.1% increase from the year-ago reported figure on 3.7% higher revenues of $5.21 billion.
The consensus estimate for 2024 earnings stands at $8.69, indicating a 2.8% increase from the year-ago reported figure on 4.4% higher revenues of $5.44 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 2.6% and 2.1% north, respectively, in the past 60 days. This reflects analysts’ optimism.
Earnings Surprise History
CME Group has a decent earnings surprise history. It has a solid track record of beating earnings estimates in each of the last six quarters.
Zacks Rank & Price Performance
CME Group currently carries a Zacks Rank #2 (Buy). Year to date, the stock has risen 14.6%, outperforming the industry’s increase of 10.7%.
Image Source: Zacks Investment Research
Business Tailwinds
CME Group has a solid market presence with a 90% market share of the global future trading and clearing services. The increasing electronic trading volume adds scalability and leverage to CME Group’s operating model.
Its clearing and transaction fees should continue to benefit from higher trading volumes, which are driven by increased volatility. The increased adoption of a greater number of crypto assets with increased interest across the entire crypto economy should add to the upside. Higher non-transactional revenues should boost the top line as well.
Banking on operational excellence, CME Group has a solid balance sheet and financial flexibility. These support strategic growth initiatives, including organic market data growth and new product extensions and offerings.
CME Group has an impressive dividend history. With the latest 10% increase in February 2023, the company has grown its dividend at a five-year CAGR of 8%. The dividend yield is 2.5%, better than the industry average of 1.5%, making the stock an attractive pick for yield-seeking investors.
Other Stocks to Consider
Some other top-ranked stocks from the finance sector are PennantPark Floating Rate Capital Ltd. (PFLT - Free Report) , Portman Ridge Finance Corporation (PTMN - Free Report) and AssetMark Financial Holdings, Inc. (AMK - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PennantPark’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the same in one, the average beat being 0.06%. Year to date, PFLT has dropped 3.1%.
The Zacks Consensus Estimate for PennantPark’s 2023 earnings indicates 5.9% year-over-year growth.
Portman Ridge Finance’s earnings surpassed the Zacks Consensus Estimate in one of the last four quarters and missed in the other three, the average beat being 4.75%. Year to date, PTMN has declined 10.8%.
The Zacks Consensus Estimate for Portman Ridge Finance’s 2023 earnings indicates 4% year-over-year growth.
AssetMark Financial’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 7.95%. Year to date, AssetMark Financial has rallied 32.6%.
The Zacks Consensus Estimate for AMK’s 2023 and 2024 earnings indicates 24.2% and 6.2% year-over-year growth, respectively.