Is Cboe Global Markets Inc (NASDAQ:CBOE) An Attractive Dividend Stock?
A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. Over the past 8 years, Cboe Global Markets Inc (NASDAQ:CBOE) has returned an average of 2.00% per year to shareholders in terms of dividend yield. Let’s dig deeper into whether Cboe Global Markets should have a place in your portfolio.
See our latest analysis for Cboe Global Markets
Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is its annual yield among the top 25% of dividend-paying companies?
Has it paid dividend every year without dramatically reducing payout in the past?
Has the amount of dividend per share grown over the past?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
Does Cboe Global Markets pass our checks?
The current trailing twelve-month payout ratio for the stock is 23.59%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 27.36%, leading to a dividend yield of 1.38%. However, EPS is forecasted to fall to $3.6 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. The reality is that it is too early to consider Cboe Global Markets as a dividend investment. It has only been consistently paying dividends for 8 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.
Relative to peers, Cboe Global Markets produces a yield of 1.33%, which is on the low-side for Capital Markets stocks.
Next Steps:
Now you know to keep in mind the reason why investors should be careful investing in Cboe Global Markets for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three pertinent aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for CBOE’s future growth? Take a look at our free research report of analyst consensus for CBOE’s outlook.
Valuation: What is CBOE worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CBOE is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
