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3. CME Group Inc. (NASDAQ:CME)

Trailing Twelve Months Net Income: $2.7 billion

Number of Hedge Fund Holders: 58

CME Group Inc. (NASDAQ:CME) is a financial exchanges and data company that operates markets for the trading of futures and options on futures contracts globally. The company also provides cleared swaps products and services in trade processing, mitigation, and data. It is headquartered in Illinois, United States.

Brian Bedell at Deutsche Bank holds a Buy rating CME Group Inc. (NASDAQ:CME) on shares as of February 9.

CME Group Inc.’s (NASDAQ:CME) key driver is its interest rate derivatives products where it dominates the market in the exchange trading of these derivatives. The company had a 10% jump in its quarterly dividend to $1.10 per share per quarter which is a 2.4% dividend yield and had a full-year dividend yield of 4.6% in 2022. The annual volume of contracts rose by 19% in 2022 to an average of 23.3 million average daily volume and an expected free cash flow yield of 5.0% in 2023.

There were 58 hedge funds long CME Group Inc. (NASDAQ:CME) in the fourth quarter. Their total stake value was $3.2 billion.

Baron Funds, an investment management company, mentioned CME Group Inc. (NASDAQ:CME) in its third-quarter 2022 investor letter. Here’s what the firm said:

“CME Group Inc. (NASDAQ:CME) operates the world’s largest and most diversified derivatives marketplace. Shares fell 13% during the quarter (despite reporting strong average daily trading volume growth of 26% year-over year) due to concerns that EPS growth will slow in 2023 as the rate hike cycle comes to an end. We continue to own the stock due to CME’s strong competitive moats, its product breadth and liquidity depth, its durable growth characteristics driven by the secular shift from uncleared over-the-counter trading to exchange-traded futures, and tailwinds from the rising rate environment.”