CME Group (NASDAQ: CME) and Virtu Financial (NASDAQ:VIRT) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitabiliy, earnings and analyst recommendations.
Volatility & Risk
CME Group has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Virtu Financial has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations for CME Group and Virtu Financial, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CME Group | 0 | 3 | 4 | 0 | 2.57 |
| Virtu Financial | 2 | 0 | 0 | 0 | 1.00 |
CME Group presently has a consensus target price of $126.71, indicating a potential upside of 4.41%. Virtu Financial has a consensus target price of $14.50, indicating a potential downside of 11.04%. Given CME Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe CME Group is more favorable than Virtu Financial.
Valuation and Earnings
This table compares CME Group and Virtu Financial’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| CME Group | $3.59 billion | 11.49 | $2.45 billion | $4.62 | 26.27 |
| Virtu Financial | $567.89 million | 1.17 | $29.28 million | $0.72 | 22.64 |
CME Group has higher revenue and earnings than Virtu Financial. Virtu Financial is trading at a lower price-to-earnings ratio than CME Group, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
83.1% of CME Group shares are owned by institutional investors. Comparatively, 90.6% of Virtu Financial shares are owned by institutional investors. 0.6% of CME Group shares are owned by company insiders. Comparatively, 69.9% of Virtu Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Dividends
CME Group pays an annual dividend of $2.64 per share and has a dividend yield of 2.2%. Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.9%. CME Group pays out 57.1% of its earnings in the form of a dividend. Virtu Financial pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Profitability
This table compares CME Group and Virtu Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CME Group | 43.62% | 7.43% | 2.24% |
| Virtu Financial | 4.41% | 20.72% | 2.79% |
Summary
CME Group beats Virtu Financial on 11 of the 16 factors compared between the two stocks.
CME Group Company Profile
CME Group Inc., through its exchanges, provides products across all asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The Company’s segment primarily consists of the Chicago Mercantile Exchange Inc. (CME), Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX) and Commodity Exchange, Inc. (COMEX) exchanges. The Company provides electronic trading around the globe on its CME Globex platform. The Company also offers clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives through its clearinghouses CME Clearing and CME Clearing Europe. It also provides hosting, connectivity and customer support for electronic trading through its co-location services. The Company’s CME Direct platform offers side-by-side trading of exchange-listed and privately negotiated markets.
Virtu Financial Company Profile
Virtu Financial, Inc. is a holding company. The Company is a technology-enabled market maker and liquidity provider to the financial markets across the world. It is engaged in buying or selling a range of securities and other financial instruments and earning small bid/ask spreads across various transactions. It has a single, multi-asset, multi-currency technology platform, through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on exchanges, markets and liquidity pools in various countries around the world. It makes markets in a range of different assets classes, such as Americas Equities; Europe, the Middle East and Africa (EMEA) Equities; Asia Pacific (APAC) Equities; Global Commodities; Global Currencies, and Options, Fixed Income and Other Securities. It makes markets for global banks, brokers and other intermediaries, and indirectly provides services to retail and institutional investors.
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