Cboe Global Markets (NASDAQ: CBOE) and BGC Partners (NASDAQ:BGCP) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Risk & Volatility
Cboe Global Markets has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500. Comparatively, BGC Partners has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.
Cboe Global Markets pays an annual dividend of $1.08 per share and has a dividend yield of 1.0%. BGC Partners pays an annual dividend of $0.72 per share and has a dividend yield of 5.2%. Cboe Global Markets pays out 31.6% of its earnings in the form of a dividend. BGC Partners pays out 60.0% 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.
Earnings and Valuation
This table compares Cboe Global Markets and BGC Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cboe Global Markets||$2.23 billion||5.56||$400.60 million||$3.42||32.28|
|BGC Partners||$3.35 billion||1.27||$51.47 million||$1.20||11.55|
Cboe Global Markets has higher earnings, but lower revenue than BGC Partners. BGC Partners 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 is a summary of current ratings and price targets for Cboe Global Markets and BGC Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cboe Global Markets||1||8||4||0||2.23|
Cboe Global Markets currently has a consensus target price of $116.64, suggesting a potential upside of 5.65%. Given Cboe Global Markets’ higher probable upside, analysts clearly believe Cboe Global Markets is more favorable than BGC Partners.
Insider and Institutional Ownership
84.4% of Cboe Global Markets shares are held by institutional investors. Comparatively, 44.3% of BGC Partners shares are held by institutional investors. 0.9% of Cboe Global Markets shares are held by insiders. Comparatively, 44.5% of BGC Partners shares are held by 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 BGC Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cboe Global Markets||17.80%||12.74%||6.93%|
Cboe Global Markets beats BGC Partners on 9 of the 16 factors compared between the two stocks.
About Cboe Global Markets
Cboe Global Markets, Inc., through its subsidiaries, operates as an options exchange in the United States. The company operates in five segments: Options, U.S. Equities, Futures, European Equities, and Global FX. The Options segment trades in listed market indexes. The U.S. Equities segment trades in listed cash equities; and provides exchange-traded products (ETP) transaction and ETP listing services. The Futures segment trades in futures, bitcoins, and other products. The European Equities segment trades in pan-European listed equities transaction services, ETPs, exchange-traded commodities, and international depository receipts. 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; Frank Russell Company; FTSE International Limited; MSCI Inc.; DJI Opco, LLC; Cboe Vest Financial Group, Inc.; and Gemini Trust Company, 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 BGC Partners
BGC Partners, Inc. (BGC) is a global brokerage company servicing the financial and real estate markets. The Company operates through two segments: Financial Services and Real Estate Services. It provides a range of services, including trade execution, broker-dealer services clearing, trade compression, post trade, information, and other back-office services to a range of financial and non-financial institutions. Its integrated platform is designed to provide flexibility to customers with regard to price discovery, execution and processing of transactions, and enables them to use voice, hybrid, or in various markets, electronic brokerage services in connection with transactions executed either over-the-counter or through an exchange. Through the Company’s FENICS, Lucera, BGC Trader, BGC Market Data and Capitalab brands, it offers electronic brokerage, financial technology solutions, market data, post-trade services, and analytics related to select financial instruments and markets.
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