Cboe Global (CBOE) Shares More Profits, Ups Dividend by 10%
Cboe Global Markets’ CBOE board of directors has approved a 10% hike in its quarterly dividend to return more profits to stockholders. This marked the 13th straight year of dividend hike. This Zacks Rank #3 (Hold) securities and exchanges stock will pay out 55 cents per share compared with 50 cents per share paid in May 2022.
Based on the stock’s Aug 16 closing price of $149.99, the new dividend will yield 1.3%. This makes Cboe Global an attractive pick for yield-seeking investors. Shareholders of record on Aug 31 will receive the increased dividend on Sep 15.
Cboe Global enjoys a strong liquidity position, despite cash outlays to enhance operating leverage. Strong liquidity not only mitigates balance sheet risks but also paves the way for accelerated capital deployment. As of Jun 30, 2023, Cboe Global had cash and cash equivalents of $413.6 million.
Cash flow from operations was $527.7 million in the first half of 2023.
Cboe Global’s dividend witnessed an eight-year (2016-2023) CAGR of 11.5%.
Return on equity, a profitability measure of how efficiently a company utilizes its shareholders' money, was 22% in the trailing 12 months, up 200 basis points year over year and better than the industry average of 11.8%.
Besides regular dividend hike, Cboe Global, one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading, remains committed to returning excess cash to shareholders also through share repurchases. During the three months ended Jun 30, 2023, CBOE declared and paid cash dividends per share for an aggregate payout of $53.2 million.
From the inception of the buyback program in 2011 through Jun 30, 2023, the company has repurchased shares for $1.4 billion. As of Jun 30, 2023, CBOE had $139.8 million of availability remaining under its existing share repurchase authorizations.
Shares of Cboe Global have gained 18.7% in the past year against the industry’s decrease of 4.6%. Expanding product lines across asset classes, broadening geographic reach, diversifying the business mix with recurring revenues and leveraging technology should help shares retain momentum.
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Given the solid capital level of the finance industry and an improving operating backdrop favoring strong operational performance, another securities and exchanges stock like Intercontinental Exchange ICE has resorted to effective capital deployment in August 2023 to enhance shareholders' value. The board of directors approved a dividend of 42 cents per share for the third quarter of 2023, reflecting an 11% increase. The dividend will be paid out on Sep 29 to shareholders of record as of Sep 15.
Stocks to Consider
Some better-ranked stocks from the finance sector include CME Group Inc. CME and Cincinnati Financial Corporation CINF, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CME Group beat estimates in each of the last four quarters, the average being 2.92%. In the past year, CME has lost 1%.
The Zacks Consensus Estimate for CME’s 2023 and 2024 earnings per share is pegged at $9.05 and $9.15, indicating a year-over-year increase of 13.5% and 1.18%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has lost 0.4%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.
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Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report
CME Group Inc. (CME) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
