Cboe Global Markets (NYSE:CBOE) and OTC Markets Group (OTCMKTS:OTCM) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.
Risk & Volatility
Cboe Global Markets has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, OTC Markets Group has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.
This is a summary of recent ratings for Cboe Global Markets and OTC Markets Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cboe Global Markets||0||0||0||0||N/A|
|OTC Markets Group||0||0||0||0||N/A|
Institutional and Insider Ownership
80.2% of Cboe Global Markets shares are owned by institutional investors. 0.6% of Cboe Global Markets shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Cboe Global Markets and OTC Markets Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cboe Global Markets||15.07%||18.23%||11.67%|
|OTC Markets Group||25.11%||70.25%||27.16%|
Cboe Global Markets pays an annual dividend of $1.68 per share and has a dividend yield of 1.9%. OTC Markets Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. Cboe Global Markets pays out 35.5% of its earnings in the form of a dividend. OTC Markets Group pays out 48.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Valuation and Earnings
This table compares Cboe Global Markets and OTC Markets Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cboe Global Markets||$2.50 billion||3.89||$374.40 million||$4.73||18.88|
|OTC Markets Group||$60.35 million||5.85||$14.94 million||$1.25||24.19|
Cboe Global Markets has higher revenue and earnings than OTC Markets Group. Cboe Global Markets is trading at a lower price-to-earnings ratio than OTC Markets Group, indicating that it is currently the more affordable of the two stocks.
OTC Markets Group beats Cboe Global Markets on 7 of the 13 factors compared between the two stocks.
Cboe Global Markets Company Profile
Cboe Global Markets, Inc., through its subsidiaries, operates as an options exchange in the United States. It operates in five segments: Options, U.S. Equities, Futures, European Equities, and Global FX. The Options segment trades in listed market indices. The U.S. Equities segment trades in listed equities; and offers exchange-traded products (ETP) transaction and ETP listing services. The Futures segment trades in futures. The European Equities segment trades in pan-European listed cash equities transaction services, ETPs, exchange-traded commodities, and international depository receipts that occur on the recognized investment exchange. This segment also provides listed cash equities and ETPs routed transaction services, as well as listing services. The Global FX segment provides institutional foreign exchange (FX) and non-deliverable forward FX transactions services. It has strategic relationships with S&P Dow Jones Indices, LLC; FTSE International Limited; Frank Russell Company; MSCI Inc.; and DJI Opco, LLC. The company was formerly known as CBOE Holdings, Inc. and changed its name to Cboe Global Markets, Inc. in October 2017. Cboe Global Markets, Inc. was founded in 1973 and is headquartered in Chicago, Illinois.
OTC Markets Group Company Profile
OTC Markets Group Inc. engages in the financial market business in the United States. It offers OTC Link Alternative Trading System, which provides a suite of quotation and trade-messaging services offering broker-dealers the control of trades and choice of counterparties for execution and attracting order flow, as well as complying with Financial Industry Regulatory Authority and Securities and Exchange Commission regulations; and OTC Link Electronic Communication Networks (ECN) that acts as an agency intermediary in relation to various transactions executed on the ECN's platform. The company also provides investors, traders, institutions, accountants, and regulators with a suite of enterprise and market data licenses through direct or extranet connectivity, third party market data redistributors, or order management systems. In addition, it offers the OTCQX Best Market and OTCQB Venture Market, a suite of market trading services to companies; the OTC Disclosure & News Service for posting financial reports, disclosure documents, and news releases; Real-Time Level 2 Quote Display, a service that companies sponsor to provide their investors with access to real-time level 2 quotes available on otcmarkets.com and the company's Website; and Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws. Further, it provides risk and performance analytics tools for the banking industry; and online content that enhances their investor communication. The company was formerly known as Pink OTC Markets Inc. and changed its name to OTC Markets Group Inc. in January 2011. OTC Markets Group Inc. was founded in 1904 and is headquartered in New York, New York.
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