CME Stock Overview
CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide.
CME Group Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$177.13|
|52 Week High||US$256.94|
|52 Week Low||US$175.08|
|1 Month Change||-9.45%|
|3 Month Change||-13.29%|
|1 Year Change||-9.90%|
|3 Year Change||-18.00%|
|5 Year Change||29.10%|
|Change since IPO||1,964.45%|
Recent News & Updates
CME Group Is The Perfect Dividend Stock To Buy While It's Cheap
Summary The stock market is in turmoil as economic weakness is meeting a hawkish Federal Reserve, creating volatility in every major asset class. The good news is that CME Group benefits from high volatility as it owns the world's most "important" futures and related options, allowing the company to boost free cash flow. Even ignoring unique years like 2022, the company has a fantastic business model allowing for high and consistent free cash flow growth used to pay a very high dividend. If you're looking for both growth and value, CME is what I consider to be a "must-own" stock. Introduction There is somewhat bad news and very good news. The somewhat bad news is that CME Group (CME) shares are having a really hard time this year, falling 22% year to date. This doesn't worry me at all as CME's core business couldn't be doing better. So far, every month of this year saw high volatility with volatility in every single area including commodities, currencies, and bonds. It's truly a dream come true for CME. Hence, the (very) good news is that investors get to buy CME Group at a ridiculous price. I have consistently averaged down this year, bringing my current return (minus dividends) to -11%. Given the valuation and CME's super strong business, I bought more. In this article, I will elaborate on everything I just mentioned and walk you through my thoughts. So, let's get to it! The Market's Pain Is CME's Gain There are a lot of reasons why I added CME to my portfolio this year. For starters, CME offers the perfect mix between a high dividend yield and growth. It's a growth/value mix, so to speak. With a market cap of $64.4 billion, CME is the largest stock exchange operator in the United States as it owns the Chicago Mercantile Exchange (where its name comes from), Chicago Board of Trade ("CBOT"), NYMEX, COMEX, and the Kansas City Board of Trade, among others. Going back to 2009, the company has returned 16.2% per year, beating the S&P 500 by almost 300 basis points. The same goes for the iShares US Broker-Dealers & Securities Exchange ETF ((AIA)), which is a good benchmark. Portfolio Visualizer Over the past five years, CME Group returned 12.8% per year, beating the S&P 500 by roughly 100 basis points. During this period, the standard deviation has come down to 21.4%, which is less than 400 basis points higher than the S&P 500. That's a very good number. What makes CME so powerful is the fact that it has a huge footprint in futures (and related options) trading. If volatility increases, CME benefits. For example, the company owns the E-mini contract, the biggest equity futures contract in the world (based on the S&P 500). It also owns all major agriculture futures including corn and soybeans. CME also owns gold and silver futures and a wide range of fixed income futures like SOFR and eurodollars. On top of that, it also owns WTI crude oil futures. Brent oil is owned by its peer Intercontinental Exchange (ICE). Equity and interest revenues account for roughly half of total revenues as the latest 2Q22 data shows. On top of that, the company also sells market data, which I believe will be a segment that we'll talk a lot about in the future as exchange operators are starting to figure out how to monetize data. CME Group Right now, markets are in turmoil. However, markets have been nervous for almost the entire year. The handy overview below shows the volatility of bonds (the famous MOVE index), currency volatility as tracked by JPMorgan (JPM), and the good old VIX index, tracking equity volatility based on S&P 500 index options. While 2021 was a rather comfortable year, 2022 is different for all three asset classes. Bloomberg This week, I wrote an in-depth article on the market's challenges. Essentially, we're dealing with an aggressive Federal Reserve, which is hiking into economic weakness to combat high inflation. This is causing dollars to be drained from "the system", it causes bonds and stocks to fall in lockstep, and it makes everyone extremely nervous. As bad as all of this is for the market, it's good news for CME Group. For example, and as reported by Seeking Alpha, these are the year-on-year growth rates - in August - of some of the company's products: Equity index ADV (average daily volume): +51% Foreign exchange ADV: +39% Interest rate ADV: +20% Record SOFT futures open interest of more than 7.7 million contracts Options ADV +18% As a result, CME has the huge benefit that it doesn't suffer from a "typical" recession. The company did not suffer during the Great Financial Crisis, nor during the short pandemic recession of 2020. After all, most recessions result in spiking volatility, which benefits CME. The biggest risk is a prolonged recession, which causes market participants to pull back from the market. That's bad for longer-term ADVs. Data by YCharts This year, free cash flow is expected to reach $2.8 billion, followed by a surge to $3.3 billion in 2024. This implies a free cash flow yield of 4.2% using 2022 estimates and 5.1% using 2024 expectations. Keep this in mind for the dividend part of this article. Moreover, the free cash flow margin (as a percentage of revenues) is constantly rising, which means the company is increasingly efficient. Last year, $0.48 of every revenue dollar turned into free cash flow. Next year, that number is expected to be $0.58. That's very impressive. Especially considering that number was below $0.40 in the first few years after the Great Financial Crisis. TIKR.com These numbers not only indicate that the company is recession "proof" and increasingly profitable, but it's also great news for its dividends. And that's the reason I'm writing this article. The CME Dividend The CME dividend is a bit different from your "average" dividend growth stock. While the company pays a steadily increasing quarterly dividend, it also distributes almost all of its free cash flow through a special dividend at the start of each year (ex-dividend day in 4Q of the year before). CME's quarterly dividend is currently $1.00 per share. That's $4.00 per year and 2.2% of the company's stock price. That's a decent yield in itself and backed by a very good-looking dividend scorecard. The company scores high on safety, which is no surprise given the high free cash flow load and the fact that net debt is less than 0.3x EBITDA. That's extremely low. It also explains why the company has an AA credit rating. That's the same credit rating as the European Union. Seeking Alpha This quarterly dividend has grown (on average) by 9.2% per year over the past 10 years. That's impressive and backed by 9.0% annual compounding free cash flow growth in the 2012-2022E period. These are the most "recent" hikes: February 2022: 11.1% February 2021: 5.9% February 2020: 13.3% In this case, it's "handy" that free cash flow growth is equal to dividend growth. It means that the dividend is backed by growing fundamentals. However, it also means that we can continue to rely on free cash flow growth to somewhat estimate where the dividend is going. After all, the special dividend is what really makes a difference here. The chart below shows the company's regular dividend as well as the special dividend. Data by YCharts The overview below shows what the company's dividend in the past few years looked like. In 2021, the quarterly dividend was $0.90. The special dividend was $3.25. This brought the total to $6.85. That's slightly more than 100% of the company's free cash flow per share of $6.77. That's based on total FCF and 358.2 million fully diluted shares (instead of basic shares outstanding). CME Group These are the expected free cash flow growth rates going forward: 2022: 22.1% 2023: 8.6% 2024: 9.9% In other words, if these numbers are even remotely right, we're dealing with a stock that is working its way up to a 5% free cash flow yield in 2024 - based on the current valuation. Given the company's dividend policy, this means it's a very high-yielding stock with the growth rates of a dividend growth stock. That's as close to a no-brainer as we can get in my book. After all, CME doesn't need its cash. It has built a fantastic business model that does not require acquired growth to remain competitive. Also, its balance sheet is so healthy that it would be a "waste" of money to reduce net debt even further. Moreover, *if* the company were to decide to change its business by investing more in growth (including acquisitions), investors would still enjoy a nice dividend, even if not all of its FCF is distributed. So, what about the valuation? Valuation I'm a bit on a buying spree. This week, I significantly increased my positions in Home Depot (HD) and Norfolk Southern (NSC) as explained in this article, and CME Group (CME). I was down roughly 15% on CME Group. I added more at $179.36, to be precise, which is now making CME my 9th-largest position. To be honest, I did not plan on buying more CME. Yet, I loved the valuation. The yield has become very juicy, and I believe the company will have a blowout year, financially speaking. So, on top of the highly attractive dividend yield, the company is trading at 18.2x 2023E EBITDA of $3.6 billion. While an 18x multiple may seem like a lot, it's the lowest valuation since early 2018. It is highly common that stocks that spend almost all of their free cash flow on dividends are trading at rather high EV/EBITDA ratios. That's OK as long as the free cash flow margin is high. And that's definitely the case here.
CME Group launches ethereum options ahead of this week's blockchain Merge
CME Group (NASDAQ:CME) has launched options on ethereum (ETH-USD) futures Monday as interest in ETH derivatives soars ahead of the blockchain's long-awaited Merge to Proof-of-Stake from Proof-of-Work this week. "Our new options contracts will also complement CME Group's Ether futures which have seen a 43% increase in average daily volume year over year," said Tim McCourt, the company's global head of Equity and FX Products. The new contracts deliver one Ether (ETH-USD) futures, sized at 50 ETH per contract, and based on the CME CF Ether-Dollar Reference Rate, which serves as a once-per-day benchmark rate of the ETH price in dollar terms. The move came after the derivatives exchange launched bitcoin euro and ether euro futures towards the end of August. Previously, (Dec. 6, 2021) CME launched Micro Ether futures to meet digital asset demand.
With EPS Growth And More, CME Group (NASDAQ:CME) Makes An Interesting Case
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks...
CME Group proposes converting eurodollar futures, options contracts to SOFR
Under its previously adopted fallbacks plan, CME Group (NASDAQ:CME) proposed Tuesday to convert eurodollar futures and options open interest into corresponding secured overnight financing rate ("SOFR") contracts on April 14, 2023. SOFR is a short-duration benchmark rate in which U.S.-based financial institutions pay each other for overnight loans. It succeeded Libor -- another benchmark interbank rate -- at the beginning of 2022. The potential conversion comes as "SOFR futures and options are now the leading liquidity pool, as open interest has reached 19 million contracts and volume has significantly outpaced Eurodollars," said Agha Mirza, CME global head of Rates and OTC Products. Eurodollar futures and options contracts that expire before June 30, 2023 do not apply to CME's (CME) proposal, the exchange said. Furthermore, the company is planning to add SOFR options to its portfolio margining solution, which allows clients to reduce margin requirements, for cleared products in December, subject to regulatory approval. Previously, (Sep. 2) CME Group ADV climbs 22% in August.
|CME||US Capital Markets||US Market|
Return vs Industry: CME exceeded the US Capital Markets industry which returned -24% over the past year.
Return vs Market: CME exceeded the US Market which returned -21.5% over the past year.
|CME Average Weekly Movement||3.1%|
|Capital Markets Industry Average Movement||0.4%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: CME is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: CME's weekly volatility (3%) has been stable over the past year.
About the Company
CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, as well as fixed income products. The company also provides clearing house services, including clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges; and trade processing and risk mitigation services.
CME Group Fundamentals Summary
|CME fundamental statistics|
Is CME overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|CME income statement (TTM)|
|Cost of Revenue||US$0|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 26, 2022
|Earnings per share (EPS)||8.04|
|Net Profit Margin||59.80%|
How did CME perform over the long term?See historical performance and comparison
4.1%Current Dividend Yield
Is CME undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CME?
Other financial metrics that can be useful for relative valuation.
|What is CME's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does CME's PE Ratio compare to its peers?
|CME PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
ICE Intercontinental Exchange
SPGI S&P Global
CME CME Group
Price-To-Earnings vs Peers: CME is good value based on its Price-To-Earnings Ratio (22x) compared to the peer average (27.7x).
Price to Earnings Ratio vs Industry
How does CME's PE Ratio compare vs other companies in the US Capital Markets Industry?
Price-To-Earnings vs Industry: CME is good value based on its Price-To-Earnings Ratio (22x) compared to the US Capital Markets industry average (24.7x)
Price to Earnings Ratio vs Fair Ratio
What is CME's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||22x|
|Fair PE Ratio||15.6x|
Price-To-Earnings vs Fair Ratio: CME is expensive based on its Price-To-Earnings Ratio (22x) compared to the estimated Fair Price-To-Earnings Ratio (15.6x).
Share Price vs Fair Value
What is the Fair Price of CME when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CME ($177.13) is trading below our estimate of fair value ($182.5)
Significantly Below Fair Value: CME is trading below fair value, but not by a significant amount.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
Discover undervalued companies
How is CME Group forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CME's forecast earnings growth (4.8% per year) is above the savings rate (1.9%).
Earnings vs Market: CME's earnings (4.8% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: CME's earnings are forecast to grow, but not significantly.
Revenue vs Market: CME's revenue (5% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: CME's revenue (5% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: CME's Return on Equity is forecast to be low in 3 years time (11.3%).
Discover growth companies
How has CME Group performed over the past 5 years?
Past Performance Score4/6
Past Performance Score 4/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CME has high quality earnings.
Growing Profit Margin: CME's current net profit margins (59.8%) are higher than last year (41.7%).
Past Earnings Growth Analysis
Earnings Trend: CME's earnings have declined by 5.3% per year over the past 5 years.
Accelerating Growth: CME's earnings growth over the past year (50.4%) exceeds its 5-year average (-5.3% per year).
Earnings vs Industry: CME earnings growth over the past year (50.4%) exceeded the Capital Markets industry 33.2%.
Return on Equity
High ROE: CME's Return on Equity (10.4%) is considered low.
Discover strong past performing companies
How is CME Group's financial position?
Financial Health Score5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: CME's short term assets ($141.5B) exceed its short term liabilities ($139.0B).
Long Term Liabilities: CME's short term assets ($141.5B) exceed its long term liabilities ($9.7B).
Debt to Equity History and Analysis
Debt Level: CME's net debt to equity ratio (5.2%) is considered satisfactory.
Reducing Debt: CME's debt to equity ratio has increased from 10.7% to 12.3% over the past 5 years.
Debt Coverage: CME's debt is well covered by operating cash flow (79%).
Interest Coverage: CME earns more interest than it pays, so coverage of interest payments is not a concern.
Discover healthy companies
What is CME Group current dividend yield, its reliability and sustainability?
Dividend Score 3/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|CME Group Dividend Yield vs Market|
|Company (CME Group)||4.1%|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Capital Markets)||3.0%|
|Analyst forecast in 3 Years (CME Group)||4.6%|
Notable Dividend: CME's dividend (4.09%) is higher than the bottom 25% of dividend payers in the US market (1.66%).
High Dividend: CME's dividend (4.09%) is low compared to the top 25% of dividend payers in the US market (4.7%).
Stability and Growth of Payments
Stable Dividend: CME's dividend payments have been volatile in the past 10 years.
Growing Dividend: CME's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (47.2%), CME's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its high cash payout ratio (99.6%), CME's dividend payments are not well covered by cash flows.
Discover strong dividend paying companies
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Terry Duffy (64 yo)
Mr. Terrence A. Duffy, also known as Terry, has been Chief Executive Officer and Chairman at CME Group Inc since November 15, 2016. Mr. Duffy is the Chief Executive Officer at New York Mercantile Exchange,...
CEO Compensation Analysis
|Terry Duffy's Compensation vs CME Group Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$23m||US$2m|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$16m||US$2m|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$12m||US$2m|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$13m||US$2m|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$12m||US$2m|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$10m||US$2m|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$6m||US$1m|
Compensation vs Market: Terry's total compensation ($USD22.92M) is above average for companies of similar size in the US market ($USD13.04M).
Compensation vs Earnings: Terry's compensation has increased by more than 20% in the past year.
Experienced Management: CME's management team is seasoned and experienced (8 years average tenure).
Experienced Board: CME's board of directors are seasoned and experienced ( 17.3 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: CME insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|12 Sep 22||SellUS$151,058||Kendal Vroman||Individual||750||US$201.41|
|09 Sep 22||SellUS$806,047||Derek Sammann||Individual||4,000||US$201.51|
|31 Aug 22||SellUS$98,194||Daniel Glickman||Individual||500||US$196.39|
|15 Aug 22||SellUS$999,216||Hilda Piell||Individual||4,901||US$203.88|
|14 Mar 22||SellUS$919,200||Sean Tully||Individual||4,000||US$229.81|
|11 Mar 22||SellUS$687,000||Sean Tully||Individual||3,000||US$229.00|
|11 Mar 22||SellUS$908,612||Kathleen Cronin||Individual||4,000||US$227.15|
|03 Mar 22||SellUS$488,000||Hilda Piell||Individual||2,000||US$244.00|
|01 Mar 22||SellUS$175,725||Daniel Glickman||Individual||750||US$234.30|
|24 Feb 22||SellUS$351,016||Hilda Piell||Individual||1,500||US$234.01|
|14 Feb 22||SellUS$1,166,004||Sunil Cutinho||Individual||4,900||US$237.96|
|10 Feb 22||SellUS$3,294,504||Kevin Kometer||Individual||13,500||US$245.07|
|10 Feb 22||SellUS$244,254||Elizabeth Cook||Individual||1,000||US$244.25|
|10 Feb 22||SellUS$733,073||Charles Carey||Individual||3,000||US$244.60|
|07 Dec 21||SellUS$115,500||Martin Gepsman||Individual||500||US$231.00|
|02 Dec 21||SellUS$1,020,758||Derek Sammann||Individual||4,500||US$226.84|
|12 Nov 21||SellUS$1,340,690||Howard Siegel||Individual||6,000||US$225.00|
|11 Nov 21||SellUS$1,104,061||Julie Holzrichter||Individual||5,000||US$220.81|
|10 Nov 21||SellUS$132,690||Timothy Bitsberger||Individual||600||US$221.15|
|09 Nov 21||SellUS$97,900||Kendal Vroman||Individual||445||US$220.00|
|05 Nov 21||BuyUS$88,806||Terrence Duffy||Individual||400||US$222.02|
|05 Nov 21||SellUS$2,220,652||Bryan Durkin||Individual||10,000||US$222.40|
|04 Nov 21||BuyUS$352,337||Terrence Duffy||Individual||1,600||US$220.26|
|28 Oct 21||SellUS$109,132||Martin Gepsman||Individual||500||US$218.29|
|Owner Type||Number of Shares||Ownership Percentage|
|State or Government||158,115||0.04%|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
CME Group Inc.'s employee growth, exchange listings and data sources
- Name: CME Group Inc.
- Ticker: CME
- Exchange: NasdaqGS
- Founded: 1898
- Industry: Financial Exchanges and Data
- Sector: Diversified Financials
- Implied Market Cap: US$63.667b
- Shares outstanding: 359.44m
- Website: https://www.cmegroup.com
Number of Employees
- CME Group Inc.
- 20 South Wacker Drive
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|MX4A||DB (Deutsche Boerse AG)||Yes||Class A Common Stock||DE||EUR||Dec 2002|
|MX4A||XTRA (XETRA Trading Platform)||Yes||Class A Common Stock||DE||EUR||Dec 2002|
|CME||NasdaqGS (Nasdaq Global Select)||Yes||Class A Common Stock||US||USD||Dec 2002|
|0HR2||LSE (London Stock Exchange)||Yes||Class A Common Stock||GB||USD||Dec 2002|
|CMEG||WBAG (Wiener Boerse AG)||Yes||Class A Common Stock||AT||EUR||Dec 2002|
|CME *||BMV (Bolsa Mexicana de Valores)||Yes||Class A Common Stock||MX||MXN||Dec 2002|
|CHME34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 4 REP 1 COM USD0.01 CLASS A||BR||BRL||May 2019|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/30 00:00|
|End of Day Share Price||2022/09/30 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.