CME Group CME is well-poised to grow, banking on the strength of its global presence, a compelling product portfolio, a focus on over-the-counter clearing services and a solid capital position. These coupled with optimistic growth projections make the stock worth retaining in one’s portfolio.

Shares of this largest futures exchange in the world in terms of trading volume as well as notional value traded have gained 0.7% year to date compared with the industry’s growth of 6.7%.

This Zacks Rank #3 (Hold) company has a solid history of delivering earnings surprises in the last 13 reported quarters. Its earnings grew 8.7% in the last five years. Zacks Investment Research

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Growth Drivers

The Zacks Consensus Estimate for CME Group’s 2024 earnings per share (EPS) is pegged at $9.60, indicating an increase of 2.8% on 5.3% higher revenues of $5.9 billion. The consensus estimate for 2025 EPS is pegged at $9.72, indicating an increase of 1.3% on 3.6% higher revenues of $6.1 billion. The long-term earnings growth rate is currently pegged at 4.6%. We estimate the bottom line to increase at a three-year (2023-2026) CAGR of 2.9%.

CME Group’s strength lies in its organic growth. The top line should improve banking on increasing clearing and transaction fees. We estimate the 2026 top line to record a three-year CAGR of 4.7%.

CME has a 90% market share of global futures trading and clearing services. It is witnessing growth in electronic trading volume and higher adoption of crypto assets with increased interest across the entire crypto economy. Clearing and transaction fees, which contribute the major share to top line, continue to benefit from increased volatility that aids trading volumes. We estimate clearing and transaction fees to increase at a three-year CAGR (2023-2026) of 4.2%.

CME’s investments are also showing desirable results. CME is focusing on improving margins through cost management. It expects its core expense to be $1.585 billion in 2024.

A solid capital position continues to support CME Group in accelerating organic market data growth, expanding its product breadth and engaging in capital deployment.

CME Group has been distributing wealth to shareholders by increasing payouts. It hiked dividends at a five-year CAGR (2019-2023) of 8%. Its dividend yield is 2.2%, better than the industry’s average of 1.6%, making the stock an attractive pick for yield-seeking investors. Also, CME Group pays five dividends per year, with the fifth being variable and based on excess cash flow in a year.

Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.



Stocks to Consider

Some better-ranked stocks from the finance sector are Coinbase Global COIN, Burford Capital BUR and AssetMark Financial AMK. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Coinbase has a solid track record of beating earnings estimates in the last four quarters. COIN stock has gained 44.2% year to date. The Zacks Consensus Estimate for COIN’s 2024 EPS indicates a year-over-year increase of 386.5%.

The Zacks Consensus Estimate for Burford Capital’s 2025 EPS indicates a year-over-year increase of 15%. Year to date, BUR has lost 0.3%. Burford Capital delivered a trailing four-quarter average earnings surprise of 113.35%.

AssetMark Financial delivered a trailing four-quarter average earnings surprise of 0.81%. Year to date, the stock has risen 15.7%. The Zacks Consensus Estimate for AMK’s 2024 and 2025 earnings suggests a year-over-year rise of 13.5% and 5.55%, respectively.

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CME Group Inc. (CME):Free Stock Analysis Report

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