Cboe Global Markets (NASDAQ:CBOE – Get Rating) and OTC Markets Group (OTCMKTS:OTCM – Get Rating) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.
Risk and Volatility
Cboe Global Markets has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, OTC Markets Group has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.
Institutional and Insider Ownership
80.8% of Cboe Global Markets shares are owned by institutional investors. Comparatively, 0.2% of OTC Markets Group shares are owned by institutional investors. 0.5% 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 is poised for long-term growth.
Valuation and Earnings
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cboe Global Markets||$3.49 billion||3.79||$529.00 million||$2.23||55.98|
|OTC Markets Group||$102.93 million||6.75||$30.48 million||$2.57||22.77|
Cboe Global Markets has higher revenue and earnings than OTC Markets Group. OTC Markets Group is trading at a lower price-to-earnings ratio than Cboe Global Markets, indicating that it is currently the more affordable of the two stocks.
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||6.30%||21.23%||9.78%|
|OTC Markets Group||30.03%||97.50%||37.58%|
This is a breakdown of current recommendations for Cboe Global Markets and OTC Markets Group, as provided 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|
Cboe Global Markets pays an annual dividend of $2.00 per share and has a dividend yield of 1.6%. OTC Markets Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Cboe Global Markets pays out 89.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OTC Markets Group pays out 28.0% of its earnings in the form of a dividend. Cboe Global Markets has increased its dividend for 12 consecutive years. Cboe Global Markets is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Cboe Global Markets beats OTC Markets Group on 7 of the 13 factors compared between the two stocks.
About Cboe Global Markets
Cboe Global Markets, Inc., through its subsidiaries, operates as an options exchange worldwide. It operates through five segments: Options, North American Equities, Futures, Europe and Asia Pacific, and Global FX. The Options segment trades in listed market indices. The North American Equities segment trades in listed U.S. and Canadian equities. This segment also offers exchange-traded products (ETP) transaction and ETP listing services. The Futures segment trades in futures. The Europe and Asia Pacific segment offers pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts, as well as ETP listings and clearing services. The Global FX segment provides institutional foreign exchange (FX) trading and non-deliverable forward FX transactions services. The company 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.
About OTC Markets Group
OTC Markets Group Inc. engages in the financial market business in the United States and internationally. It offers OTC Link Alternative Trading System, an interdealer quotation and trade messaging system; OTC Dealer, a real-time, front-end application that provides consolidated quotation, trading, and information system to attract and access market liquidity; OTC FIX, which uses the industry standard FIX protocol for quote submission, trading, and routing of execution reports; and OTC Link Electronic Communication Networks (ECN) and OTC Link National Quotation Bureau (NQB) that acts as the executing party on an agency basis in relation to transactions executed on platforms. The company also provides OTC Markets Real-Time Data products that provides quote, trade, and reference data for OTC Link ATS; OTC Markets Pricing and Reference Data products for detailed view into the securities and issuers within the OTC market; and compliance data products. In addition, it offers OTC Disclosure & News Service for publishing and distributing data, news, and financials; Real-Time Level 2 Quote Display, a service that companies sponsor to provide their investors with access to real-time level 2 quotes on otcmarkets.com and the issuer's Website; Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws; and Virtual Investor Conferences, which allows issuers to communicate and engages with investors, as well as operates the OTCQX Best Market, OTCQB Venture Market, and Pink Open Market. Further, it offers software, and risk and performance analytics tools for the banking and finance industries; online capital raising solutions; and OTCIQ, an investor relations portal. 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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