Why Should You Retain CME Group (CME) In Your Portfolio
Zacks Investment Research | Aug 17, 2017 10:22PM ET
Shares of CME Group Inc. (NASDAQ:CME) have outperformed the industry , quarter to date. The company also witnessed estimate revisions over the past 30 days. This Zacks Rank #3 (Hold) securities exchange is high on potential, driven by a few good growth drivers.
Positive Growth Projections: The Zacks Consensus Estimate for earnings is $4.81 for 2017, reflecting year-over-year growth of 6.28%. For 2018, the Zacks Consensus Estimate for earnings is pegged at $5.27, representing 9.41% year-over-year growth.
CME Group has long-term expected earnings per share growth of 10.6%.
An Outperformer: CME Group shares have rallied 18.4% in a year’s time, outperforming the industry’s 18.0% growth. Shares have also outperformed the S&P 500, increasing 11.0% over the same time frame.
Positive Earnings Surprise History: CME Group has surpassed the Zacks Consensus Estimate in the last four quarters. The company’s average four-quarter surprise is 2.19%.
Growth Drivers in Place: Fundamental growth remains a huge driver for the company’s improving operating leverage. As the company notes structural shifts in both the crude and natural gas markets (the United States is now becoming the swing producer in these markets), it remains focused to capitalize on and benefit from this shift.
The company’s decision to shut down London-based derivatives exchange and clearing house, CME Europe and CME Clearing Europe, by this year-end, will result in annual savings between $10 million and $12 million, which might hugely impact 2018. The same will also free up over $150 million in capital.
The company has also been witnessing better average daily volumes. Revenues too have improved. Management anticipates organic market data revenue growth of 5-6% over the next few years with 2017 being back-end loaded.
CME Group boasts a healthy balance sheet. The company holds a strong debt profile with no maturities until 2018 and again till 2022. Additionally, modest liquidity supports healthy capital deployment via dividend payouts, adding to the company’s financial flexibility.
Stocks to Consider
Some better-ranked stocks from the finance sector are American Financial Group, Inc. (NYSE:AFG) , CNO Financial Group, Inc. (NYSE:CNO) and Argo Group International Holdings, Ltd. (NASDAQ:AGII) , each carrying a Zacks Rank #2 (Buy). You can see .
Get The News You Want
American Financial provides property and casualty insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 17.03%.
CNO Financial develops, markets and administers health insurance, annuity, individual life insurance and other insurance products for senior and middle-income markets in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.69%.
Argo Group underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. The company delivered positive surprises in all the last four quarters with an average beat of 26.51%.
4 Surprising Tech Stocks to Keep an Eye on
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without. More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.