CME Group Inc. (CME) stock analysis

P/E above its 5-year median

CME's P/E of 25.9 is above its own 5-year median of 25.2.

P/E above the industry

CME's P/E of 25.9 is above the Security & commodity brokers, dealers, exchanges & services median of 25.3.

EV/EBITDA above its 5-year median

CME's EV/EBITDA of 24.2 is above its 5-year median of 22.2.

P/B above the industry

CME's price-to-book of 4.26 is above the Security & commodity brokers, dealers, exchanges & services median of 4.26.

Trading above fair value

The share price of $315.87 is above our fair value estimate of $262.74.

Margin of safety under 20%

The price is 20.2% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 9.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 14.7% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 9.0% over the last twelve months; the Security & commodity brokers, dealers, exchanges & services median is 14.4%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 14.1%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 14.1% a year on average over the last five fiscal years.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

No debt

CME has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 1.02 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.59; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

CME paid dividends worth 3.6% of the share price over the last twelve months.

Yield below Treasuries

The 3.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; CME yields 3.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Not covered by free cash flow

Dividends take 94.3% of free cash flow.