Financial Comparison: Cboe Global Markets (NASDAQ:CBOE) and Intercontinental Exchange (NYSE:ICE)

Cboe Global Markets (NASDAQ:CBOEGet Rating) and Intercontinental Exchange (NYSE:ICEGet Rating) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Dividends

Cboe Global Markets pays an annual dividend of $2.00 per share and has a dividend yield of 1.6%. Intercontinental Exchange pays an annual dividend of $1.52 per share and has a dividend yield of 1.4%. Cboe Global Markets pays out 89.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Intercontinental Exchange pays out 33.7% of its earnings in the form of a dividend. Cboe Global Markets has increased its dividend for 12 consecutive years and Intercontinental Exchange has increased its dividend for 8 consecutive years. Cboe Global Markets is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Cboe Global Markets and Intercontinental Exchange’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cboe Global Markets $3.49 billion 3.79 $529.00 million $2.23 55.98
Intercontinental Exchange $9.17 billion 6.52 $4.06 billion $4.51 23.71

Intercontinental Exchange has higher revenue and earnings than Cboe Global Markets. Intercontinental Exchange is trading at a lower price-to-earnings ratio than Cboe Global Markets, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Cboe Global Markets and Intercontinental Exchange, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cboe Global Markets 0 0 0 0 N/A
Intercontinental Exchange 0 3 6 1 2.80

Intercontinental Exchange has a consensus price target of $126.17, indicating a potential upside of 17.98%. Given Intercontinental Exchange’s higher probable upside, analysts plainly believe Intercontinental Exchange is more favorable than Cboe Global Markets.

Profitability

This table compares Cboe Global Markets and Intercontinental Exchange’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cboe Global Markets 6.30% 21.23% 9.78%
Intercontinental Exchange 26.58% 13.38% 1.47%

Institutional & Insider Ownership

80.8% of Cboe Global Markets shares are owned by institutional investors. Comparatively, 87.0% of Intercontinental Exchange shares are owned by institutional investors. 0.5% of Cboe Global Markets shares are owned by company insiders. Comparatively, 1.3% of Intercontinental Exchange shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Cboe Global Markets has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Intercontinental Exchange has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Summary

Intercontinental Exchange beats Cboe Global Markets on 12 of the 17 factors compared between the two stocks.

About Cboe Global Markets

(Get Rating)

Cboe Global Markets, Inc., through its subsidiaries, operates as an options exchange worldwide. It operates through five segments: Options, North American Equities, Futures, Europe and Asia Pacific, and Global FX. The Options segment trades in listed market indices. The North American Equities segment trades in listed U.S. and Canadian equities. This segment also offers exchange-traded products (ETP) transaction and ETP listing services. The Futures segment trades in futures. The Europe and Asia Pacific segment offers pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts, as well as ETP listings and clearing services. The Global FX segment provides institutional foreign exchange (FX) trading and non-deliverable forward FX transactions services. The company has strategic relationships with S&P Dow Jones Indices, LLC; FTSE International Limited; Frank Russell Company; MSCI Inc.; and DJI Opco, LLC. The company was formerly known as CBOE Holdings, Inc. and changed its name to Cboe Global Markets, Inc. in October 2017. Cboe Global Markets, Inc. was founded in 1973 and is headquartered in Chicago, Illinois.

About Intercontinental Exchange

(Get Rating)

Intercontinental Exchange, Inc., together with its subsidiaries, operates regulated exchanges, clearing houses, and listings venues for commodity, financial, fixed income, and equity markets in the United States, the United Kingdom, the European Union, Singapore, Israel, and Canada. It operates through three segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology. The company operates marketplaces for listing, trading, and clearing an array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange, and equities, as well as corporate and exchange-traded funds; trading venues, including 13 regulated exchanges and 6 clearing houses; and offers futures and options products for energy, agricultural and metals, financial, cash equities and equity, over-the-counter, and other markets, as well as listings and data and connectivity services. It also provides fixed income data and analytic, fixed income execution, CDS clearing, and other multi-asset class data and network services. In addition, the company offers proprietary and comprehensive mortgage origination platform, which serves residential mortgage loans; closing solutions that provides customers connectivity to the mortgage supply chain and facilitates the secure exchange of information; data and analytics services; and Data as a Service for lenders to access data and origination information. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.

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