NasdaqGS:CME

Stock Analysis Report

Executive Summary

CME Group Inc., through its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide.

Rewards

Earnings are forecast to grow 9.03% per year

Risk Analysis

Unstable dividend track record

Profit margins (41%) are lower than last year

Shareholders have been diluted in the past year



Snowflake Analysis

Average dividend payer with questionable track record.


Similar Companies

Share Price & News

How has CME Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CME has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.6%

CME

0.5%

US Capital Markets

-0.3%

US Market


1 Year Return

10.1%

CME

20.1%

US Capital Markets

18.6%

US Market

Return vs Industry: CME underperformed the US Capital Markets industry which returned 20.1% over the past year.

Return vs Market: CME underperformed the US Market which returned 18.6% over the past year.


Shareholder returns

CMEIndustryMarket
7 Day1.6%0.5%-0.3%
30 Day3.5%5.4%2.2%
90 Day-7.7%7.6%5.6%
1 Year12.4%10.1%22.4%20.1%21.1%18.6%
3 Year87.0%67.8%39.5%31.6%45.6%36.2%
5 Year190.5%136.5%84.0%66.9%71.1%52.2%

Price Volatility Vs. Market

How volatile is CME Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CME Group undervalued compared to its fair value and its price relative to the market?

36.03x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CME ($205.96) is trading above our estimate of fair value ($131.67)

Significantly Below Fair Value: CME is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CME is poor value based on its PE Ratio (36x) compared to the Capital Markets industry average (33.2x).

PE vs Market: CME is poor value based on its PE Ratio (36x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: CME is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: CME is good value based on its PB Ratio (2.7x) compared to the US Capital Markets industry average (6.3x).


Next Steps

Future Growth

How is CME Group forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

9.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CME's forecast earnings growth (9% per year) is above the savings rate (1.7%).

Earnings vs Market: CME's earnings (9% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: CME's earnings are forecast to grow, but not significantly.

Revenue vs Market: CME's revenue (4.5% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: CME's revenue (4.5% 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 (10.4%).


Next Steps

Past Performance

How has CME Group performed over the past 5 years?

21.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CME has high quality earnings.

Growing Profit Margin: CME's current net profit margins (41%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: CME's earnings have grown significantly by 21.3% per year over the past 5 years.

Accelerating Growth: CME's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CME had negative earnings growth (-55%) over the past year, making it difficult to compare to the Capital Markets industry average (20.6%).


Return on Equity

High ROE: CME's Return on Equity (7.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CME Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CME has a low level of unsold assets or inventory.

Debt Coverage by Assets: CME's debt is covered by short term assets (assets are 11.3x debt).


Financial Institutions Analysis

Asset Level: CME's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if CME has a sufficient allowance for bad loans.

Low Risk Liabilities: CME reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if CME has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CME has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if CME has an appropriate level of bad loans.


Next Steps

Dividend

What is CME Group's current dividend yield, its reliability and sustainability?

2.31%

Current Dividend Yield


Upcoming Dividend Payment

Purchase CME Group before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.3%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years3.0%

Current dividend yield vs market & industry

Notable Dividend: CME's dividend (2.31%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: CME's dividend (2.31%) is low compared to the top 25% of dividend payers in the US market (3.7%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (51.6%), CME's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CME's dividends in 3 years are forecast to be covered by earnings (82.4% payout ratio).


Next Steps

Management

What is the CEO of CME Group's salary, the management and board of directors tenure and is there insider trading?

4.8yrs

Average management tenure


CEO

Terry Duffy (61yo)

3.1yrs

Tenure

US$13,416,665

Compensation

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

Compensation vs Market: Terry's total compensation ($USD13.42M) is about average for companies of similar size in the US market ($USD11.01M).

Compensation vs Earnings: Terry's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.8yrs

Average Tenure

55yo

Average Age

Experienced Management: CME's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

17.7yrs

Average Tenure

68yo

Average Age

Experienced Board: CME's board of directors are seasoned and experienced ( 17.7 years average tenure).


Insider Trading

Insider Buying: CME insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$59,70615 Nov 19
Ronald Pankau
EntityIndividual
Shares300
Max PriceUS$199.02
SellUS$1,606,53610 Sep 19
Sean Tully
EntityIndividual
Role
Senior Key Executive
Senior MD and Global Head of Financial & OTC Products
Shares7,200
Max PriceUS$223.13
SellUS$108,00528 Aug 19
Daniel Glickman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares500
Max PriceUS$216.01
SellUS$318,69012 Aug 19
Dennis Suskind
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,500
Max PriceUS$212.46
SellUS$402,73608 Aug 19
Sunil Cutinho
EntityIndividual
Shares1,990
Max PriceUS$202.38
SellUS$1,025,00005 Aug 19
Howard Siegel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceUS$205.00
SellUS$7,005,25005 Aug 19
Terrence Duffy
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares35,000
Max PriceUS$200.15
SellUS$1,272,51213 Jun 19
Derek Sammann
EntityIndividual
Shares6,400
Max PriceUS$198.83
SellUS$415,13713 Jun 19
Julie Winkler
EntityIndividual
Shares2,097
Max PriceUS$198.10
SellUS$61,28112 Jun 19
Elizabeth Cook
EntityIndividual
Shares300
Max PriceUS$204.27
SellUS$503,02510 Jun 19
Martin Gepsman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$201.21
SellUS$99,50307 Jun 19
Elizabeth Cook
EntityIndividual
Shares500
Max PriceUS$199.06
SellUS$136,04504 Jun 19
Timothy Bitsberger
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares700
Max PriceUS$194.35
SellUS$1,790,22009 May 19
Henning and Carey Trading Co.
EntityCompany
Shares10,000
Max PriceUS$179.29
SellUS$356,14009 May 19
Martin Gepsman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$178.07
SellUS$503,73018 Mar 19
Martin Gepsman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$167.91
SellUS$36,58004 Mar 19
Ronald Pankau
EntityIndividual
Shares200
Max PriceUS$182.90
SellUS$1,794,88127 Feb 19
Jeffrey Bernacchi
EntityIndividual
Shares10,087
Max PriceUS$177.94
SellUS$2,587,77014 Dec 18
Sean Tully
EntityIndividual
Role
Senior Key Executive
Senior MD and Global Head of Financial & OTC Products
Shares13,500
Max PriceUS$192.16
SellUS$35,53012 Dec 18
Ronald Pankau
EntityIndividual
Shares187
Max PriceUS$190.00

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.8%.


Management Team

  • Jack Sandner (78yo)

    Consultant

    • Tenure: 1.6yrs
    • Compensation: US$674.60k
  • Terry Duffy (61yo)

    Chairman & CEO

    • Tenure: 3.1yrs
    • Compensation: US$13.42m
  • Leo Melamed (87yo)

    Consultant

    • Tenure: 1.5yrs
    • Compensation: US$980.94k
  • Bryan Durkin (58yo)

    President

    • Tenure: 0yrs
    • Compensation: US$6.59m
  • John Pietrowicz (54yo)

    Senior MD & CFO

    • Tenure: 5yrs
    • Compensation: US$3.76m
  • Kevin Kometer (54yo)

    Senior MD & Chief Information Officer

    • Tenure: 11.4yrs
    • Compensation: US$2.71m
  • Julie Holzrichter (50yo)

    Senior MD & COO

    • Tenure: 5.3yrs
    • Compensation: US$3.24m
  • John Peschier (51yo)

    Managing Director of Investor Relations

    • Tenure: 0yrs
  • Sean Tully (55yo)

    Senior MD and Global Head of Financial & OTC Products

    • Tenure: 8.3yrs
    • Compensation: US$3.08m
  • Jack Tobin (55yo)

    MD & Chief Accounting Officer

    • Tenure: 4.8yrs

Board Members

  • Larry Gerdes (70yo)

    Lead Director

    • Tenure: 2.3yrs
    • Compensation: US$270.16k
  • Dennis Chookaszian (75yo)

    Independent Director

    • Tenure: 15.7yrs
    • Compensation: US$242.83k
  • Dan Glickman (74yo)

    Independent Director

    • Tenure: 18.3yrs
    • Compensation: US$248.00k
  • Dennis Suskind (76yo)

    Independent Director

    • Tenure: 11.3yrs
    • Compensation: US$283.58k
  • Terry Duffy (61yo)

    Chairman & CEO

    • Tenure: 3.1yrs
    • Compensation: US$13.42m
  • Martin Gepsman (66yo)

    Independent Director

    • Tenure: 25.9yrs
    • Compensation: US$245.33k
  • William Shepard (72yo)

    Independent Director

    • Tenure: 22.9yrs
    • Compensation: US$250.50k
  • Howard Siegel (62yo)

    Independent Director

    • Tenure: 19.9yrs
    • Compensation: US$259.16k
  • Bryan Durkin (58yo)

    President

    • Tenure: 0yrs
    • Compensation: US$6.59m
  • Tim Bitsberger (59yo)

    Independent Director

    • Tenure: 11.6yrs
    • Compensation: US$237.83k

Company Information

CME Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CME Group Inc.
  • Ticker: CME
  • Exchange: NasdaqGS
  • Founded: 1898
  • Industry: Financial Exchanges and Data
  • Sector: Diversified Financials
  • Market Cap: US$73.149b
  • Shares outstanding: 358.36m
  • Website: https://www.cmegroup.com

Number of Employees


Location

  • CME Group Inc.
  • 20 South Wacker Drive
  • Chicago
  • Illinois
  • 60606
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MX4ADB (Deutsche Boerse AG)YesClass A Common StockDEEURDec 2002
CMENasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDDec 2002
0HR2LSE (London Stock Exchange)YesClass A Common StockGBUSDDec 2002
CMEGWBAG (Wiener Boerse AG)YesClass A Common StockATEURDec 2002
CHME34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REP 0.25 COM USD0.01 CLASS ABRBRLMay 2019

Biography

CME Group Inc., through its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers a range of products across various asset classes, includ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/07 00:06
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.