Contrasting CME Group (NASDAQ:CME) & Global Brokerage (NASDAQ:GLBR)

CME Group (NASDAQ:CME) and Global Brokerage (OTCMKTS:GLBR) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

84.9% of CME Group shares are held by institutional investors. 1.2% of CME Group shares are held by company insiders. Comparatively, 9.0% of Global Brokerage shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

CME Group has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500. Comparatively, Global Brokerage has a beta of 4.07, indicating that its share price is 307% more volatile than the S&P 500.

Dividends

CME Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.4%. Global Brokerage does not pay a dividend. CME Group pays out 44.0% of its earnings in the form of a dividend.

Profitability

This table compares CME Group and Global Brokerage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CME Group 39.36% 9.14% 3.22%
Global Brokerage N/A N/A N/A

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CME Group and Global Brokerage, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CME Group 2 6 6 0 2.29
Global Brokerage 0 0 0 0 N/A

CME Group presently has a consensus target price of $203.69, suggesting a potential downside of 4.45%. Given CME Group’s higher possible upside, analysts plainly believe CME Group is more favorable than Global Brokerage.

Earnings and Valuation

This table compares CME Group and Global Brokerage’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CME Group $4.31 billion 17.71 $1.96 billion $6.82 31.26
Global Brokerage $284.06 million 0.00 $70.64 million N/A N/A

CME Group has higher revenue and earnings than Global Brokerage.

Summary

CME Group beats Global Brokerage on 10 of the 13 factors compared between the two stocks.

About CME Group

CME Group Inc., through its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers a range of products across various asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, and metals, as well as fixed income products. The company executes trade through its electronic trading platforms, open outcry, and privately negotiated transactions; and provides clearing for exchange-traded contracts and cleared swaps, as well as settlement services. It also offers transaction lifecycle management services, such as trade and portfolio management, financial resource optimization, analytics, and regulatory reporting. In addition, the company provides a range of market data services, including real-time and historical data services. It serves professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group Inc. was founded in 1898 and is headquartered in Chicago, Illinois.

About Global Brokerage

Global brokerage, Inc., formerly FXCM Inc. (FXCM), is engaged in providing online foreign exchange (FX) trading, contract for difference (CFD) trading, spread betting and related services. The Company owns over 50% of FXCM Group, LLC (FXCM Group). FXCM Group is a holding company of Forex Capital Markets LLC, (FXCM US), Forex Capital Markets Limited, inclusive of all EU branches (FXCM UK), FXCM Australia Pty. Limited, (FXCM AU). The Company focuses on providing global traders with access to market by offering trading tools, hiring trading educators. In addition, FXCM offers educational courses on FX trading and provides trading tools data and resources. FXCM Pro provides retail brokers, small hedge funds and market banks access to wholesale execution and liquidity, as well as providing high and medium frequency funds access to prime brokerage services through FXCM Prime.

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