Cboe Global Markets, Inc. CBOE is poised for long-term growth on the back of a diversified product portfolio, trading volume growth and expense synergies. The company has an impressive Growth Score of B. This style score analyzes the growth prospects of a company. Its long-term earnings growth is pegged at 9%, higher than the industry average of 8.6%.
Shares of Cboe Global have gained 22.5% year to date compared with the industry’s increase of 22.2% and the Zacks S&P 500 composite’s rise of 15.1%.
Cboe Global’s return on equity was 16.6% in the second quarter of 2019, higher than the industry average of 10.9%. Return on equity is a profitability measure that identifies the company’s efficiency in utilizing its shareholders’ funds.
The company has a solid earnings surprise history. It beat estimates in each of the last six quarters with the average being 7.89%.
Cboe Global Markets enjoys solid organic growth driven by trading volume growth. Strong market position, global reach and strength in its proprietary products, primarily SPX options, VIX options and VIX futures poise it for solid growth.
The company has been making strategic acquisitions to gain competitive edge by diversifying as well as adding capabilities to its portfolio. The company is on track to achieve run rate expense synergy target of $85 million in 2020 from its acquisition of Bats.
Cboe Global’s strong liquidity mitigates balance sheet risks as well as supports effective capital deployment. This Zacks Rank #3 (Hold) stock exchange operator has more than doubled its dividend payout in the last seven years with the current yield being 1.3%. It also engages in regular buybacks, which makes the stock an attractive pick for yield-seeking investors.
Stocks to Consider
Some better-ranked stocks from the finance sector are Brown & Brown, Inc. BRO, Willis Towers Watson Public Limited Company WLTW and Radian Group RDN. Each of these stocks carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Brown & Brown markets and sells insurance products and services in the United States, England, Canada, Bermuda and the Cayman Islands. The company delivered positive surprise of 14.29% in the last reported quarter.
Willis Towers operates as an advisory, broking, and solutions company worldwide. The company delivered positive surprise of 1.14% in the last reported quarter.
Radian Group engages in the mortgage and real estate services business in the United States. The company delivered positive earnings surprise of 14.29% in the last reported quarter.
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