This owner of financial exchanges beat earnings estimates by $0.03 last quarter, and four analysts have increased their EPS forecasts for the company in the past 30 days.
CME Group (CME)
From Cabot Dividend Investor
CME Group (CME) owns and operates financial exchanges, including the world’s largest derivatives exchange, where investors bet on the direction of interest rates, stocks, currencies, commodity prices and more. I picked the stock at the start of the year for growth as well as its track record of dividend increases and large special dividends.
CME did well for the first few months of 2018, as increasing stock market volatility spurred more trading on CME’s exchanges. However, the stock cooled off in March, and spent most of the next three months consolidating.
Then CME’s exchanges saw their highest trading volume ever in May, after an unexpected rout in the Italian bond market triggered thousands of trades in interest rate and foreign exchange contracts. The big day contributed to a 22% increase in CME’s average daily volume in May, and the stock broke out to new all-time highs a couple weeks later. That’s brought the stock’s year-to-date gains to about 15% (plus two 70-cent dividends).
CME’s momentum is still mostly sideways, but the future looks bright. Estimates are rising, and EPS are now expected to grow by 42% this year and 6% next year. Plus, the company distributes excess cash as a special dividend at the end of each year. Last year’s special dividend of $3.50 more than doubled the stock’s annual yield, and management has said they expect this year’s payout to be even larger.
Investors looking to add growth and income to their portfolio can Buy CME here.
Chloe Lutts Jensen, Cabot Dividend Investor, www.cabotwealth.com, 978-745-5532, June 21, 2018