April 15, 2025 a 06:46 am
CME: Dividend Analysis - CME Group Inc.
CME Group Inc. offers a substantial dividend yield, making it an attractive choice for income-focused investors. The company's long history of dividend payments and a promising growth outlook further solidify its position in the dividends market. Investors should note the high payout ratios, which could signal sustainability issues if not supported by strong earnings and cash flows.
📊 Overview
CME Group Inc.'s financial data reveals a robust dividend profile. Notably, the dividend yield of 4.12% is particularly attractive in the current low-interest environment. With a history of 23 years of continuous dividend payments, the company's dividend policy appears stable. No dividend cuts or suspensions have been recorded recently, which is a positive sign for reliability.
| Metric | Details |
|---|---|
| Sector | Financial Services |
| Dividend Yield | 4.12% |
| Current Dividend per Share | 9.97 USD |
| Dividend History | 23 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
CME Group Inc.'s consistent dividend payments over the years demonstrate a commitment to shareholder returns. This history is crucial as it suggests the company prioritizes dividend payouts, even during economic fluctuations. Understanding past dividend behavior can provide insights into future payments.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.25 |
| 2024 | 10.40 |
| 2023 | 9.65 |
| 2022 | 8.50 |
| 2021 | 6.85 |
📈 Dividend Growth
The dividend growth trend of CME Group Inc. has been moderate yet consistent, implying a strong ability to increase shareholder returns over time. Understanding dividend growth also provides a sense of the company's earnings stability and future prospects.
| Time | Growth |
|---|---|
| 3 years | 14.93% |
| 5 years | 13.59% |
The average dividend growth is 13.59% over 5 years. This shows moderate but steady dividend growth.
⚠️ Payout Ratio
The payout ratio is a critical measure of dividend sustainability. When a company pays out most of its earnings or free cash flow as dividends, it may indicate a risk of cutting dividends if earnings decline.
| Key figure | Ratio |
|---|---|
| EPS-based | 102.68% |
| Free cash flow-based | 99.93% |
The EPS-based payout ratio of 102.68% and FCF-based of 99.93% suggest the company is paying out a substantial portion of its earnings and cash flow, which may impact future dividend increases if profitability issues arise.
✅ Cashflow & Capital Efficiency
Analyzing cash flow and capital efficiency provides insights into how a company funds its operations and growth. Strong metrics support dividend payments and future growth investments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 4.42% | 4.47% | 4.92% |
| Earnings Yield | 4.22% | 4.27% | 4.46% |
| CAPEX to Operating Cash Flow | N/A | 2.21% | 2.94% |
| Stock-based Compensation to Revenue | 1.46% | 1.49% | 1.68% |
| Free Cash Flow / Operating Cash Flow Ratio | 100% | 97.79% | 97.06% |
The free cash flow yield is relatively stable, suggesting robust cash generation capabilities. High free cash flow to operating cash flow ratio indicates efficient cash conversion.
📉 Balance Sheet & Leverage Analysis
This analysis offers insights into the company's debt levels and its capability to manage financial obligations. It is essential for understanding financial stability and risk during downturns.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 12.94% | 14.53% | 12.79% |
| Debt-to-Assets | 2.49% | 2.99% | 1.97% |
| Debt-to-Capital | 11.46% | 12.68% | 11.34% |
| Net Debt to EBITDA | 11.51% | 25.66% | 21.34% |
| Current Ratio | 1.01 | 1.02 | 1.01 |
| Quick Ratio | 1.01 | 1.02 | 0.03 |
| Financial Leverage | 5.19 | 4.85 | 6.48 |
CME Group's debt levels are manageable relative to equity and assets, highlighting a conservative financial structure and low leverage risk.
✅ Fundamental Strength & Profitability
Profitability metrics such as return on equity and profit margins provide insights into the company's efficiency at generating profit relative to its peers.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 13.31% | 12.07% | 10.01% |
| Return on Assets | 2.57% | 2.49% | 1.54% |
| Margins: Net | 57.52% | 57.83% | 53.61% |
| EBIT | 76.71% | 77.31% | 72.78% |
| EBITDA | 82.20% | 67.90% | 67.05% |
| Gross | 86.13% | 85.15% | 84.99% |
| Research & Development to Revenue | 3.10% | 3.92% | 3.76% |
The profitability measures are strong, reflecting efficient operational management and healthy margins, supporting ongoing financial strength.
📈 Price Development
✅ Dividend Scoring System
| Criteria | Details | Score |
|---|---|---|
| Dividend yield | Strong | |
| Dividend Stability | Very High | |
| Dividend Growth | Moderate | |
| Payout Ratio | Concerning | |
| Financial Stability | Good | |
| Dividend Continuity | Exceptional | |
| Cashflow Coverage | Strong | |
| Balance Sheet Quality | Solid |
Overall Score: 34/40
✅ Rating
CME Group Inc. offers an appealing dividend profile with strong historical stability and moderate growth. However, high payout ratios warrant cautious monitoring. The overall financial stability and robust cash flow coverage make it a favorable option for dividend investors seeking consistency and growth potential. Recommend holding for steady income with monitoring of the payout ratio for sustainability.