CME Group Inc (CME): Will Futures Keep Gaining Popularity?

NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) provides trading, exchange technology, and securities listing services.  The stock trades at just 14 times earnings, which may seem like a bargain at first, however I’m not so sure. NASDAQ’s earnings and revenues are relatively unpredictable.  Trading volumes can fluctuate wildly, and in the most recent quarter, volumes were down a full 20% from the quarter before.

Dividends

CME Group has paid a dividend every year since 2003 and has increased it regularly, from 13 cents per share in 2003 to $1.80 currently, or a yield of 3.12%.  I would be very surprised if there wasn’t another increase this year.  Something in the $2.00 per share range is what I would expect.

Conclusion

I believe CME is a fairly valued company in arguably the fastest growing segment of the financial services industry (futures and options).  More important than the earnings numbers themselves will be the company’s outlook for the future, i.e., is the growth in futures trading volumes going to continue?

The article CME Group: Will Futures Keep Gaining Popularity? originally appeared on Fool.com and is written by Matthew Frankel.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 30 percentage points in 13 months Learn how!

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!