Critical Review: OTC Markets Group (OTCM) & Cboe Global Markets (CBOE)
OTC Markets Group (NASDAQ: CBOE) and Cboe Global Markets (NASDAQ:CBOE) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.
This table compares OTC Markets Group and Cboe Global Markets’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|OTC Markets Group||26.16%||134.80%||61.02%|
|Cboe Global Markets||19.22%||14.16%||8.25%|
This table compares OTC Markets Group and Cboe Global Markets’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OTC Markets Group||$52.18 million||6.35||$12.56 million||$1.82||15.78|
|Cboe Global Markets||$2.23 billion||5.22||$400.60 million||$3.42||30.43|
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.
OTC Markets Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Cboe Global Markets pays an annual dividend of $1.24 per share and has a dividend yield of 1.2%. OTC Markets Group pays out 33.0% of its earnings in the form of a dividend. Cboe Global Markets pays out 36.3% 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. Cboe Global Markets has raised its dividend for 8 consecutive years. OTC Markets Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
OTC Markets Group has a beta of 0.09, suggesting that its stock price is 91% less volatile than the S&P 500. Comparatively, Cboe Global Markets has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.
Insider & Institutional Ownership
0.0% of OTC Markets Group shares are owned by institutional investors. Comparatively, 82.6% of Cboe Global Markets shares are owned by institutional investors. 0.9% of Cboe Global Markets shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent recommendations and price targets for OTC Markets Group and Cboe Global Markets, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|OTC Markets Group||0||0||0||0||N/A|
|Cboe Global Markets||0||9||6||0||2.40|
Cboe Global Markets has a consensus target price of $116.23, suggesting a potential upside of 11.69%. Given Cboe Global Markets’ higher possible upside, analysts clearly believe Cboe Global Markets is more favorable than OTC Markets Group.
Cboe Global Markets beats OTC Markets Group on 10 of the 16 factors compared between the two stocks.
About OTC Markets Group
OTC Markets Group Inc. engages in the financial market business in the United States. It offers OTC Link Alternative Trading System, which connects a network of brokers-dealers providing liquidity and execution services for various securities. The company also provides investors, traders, institutions, and regulators with a suite of enterprise and user level market data licenses through direct or extranet connectivity, third party market data redistributors, or order management systems. In addition, it offers 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 Blue Sky Monitoring Service for analysis, review, and guidance about a company's compliance with the United States securities laws. 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.
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.
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