Reviewing KKR & Co. Inc. (NYSE:KKR) and CME Group (NASDAQ:CME)

CME Group (NASDAQ:CME) and KKR & Co. Inc. (NYSE:KKR) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Profitability

This table compares CME Group and KKR & Co. Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CME Group	63.30%	15.60%	2.20%
KKR & Co. Inc.	14.41%	5.88%	1.07%

Risk & Volatility

CME Group has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500. Comparatively, KKR & Co. Inc. has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CME Group and KKR & Co. Inc., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CME Group	3	6	9	0	2.33
KKR & Co. Inc.	0	3	12	0	2.80

CME Group currently has a consensus target price of $288.56, indicating a potential upside of 1.07%. KKR & Co. Inc. has a consensus target price of $130.00, indicating a potential upside of 18.19%. Given KKR & Co. Inc.’s stronger consensus rating and higher probable upside, analysts clearly believe KKR & Co. Inc. is more favorable than CME Group.

Institutional and Insider Ownership

87.7% of CME Group shares are owned by institutional investors. Comparatively, 76.3% of KKR & Co. Inc. shares are owned by institutional investors. 0.3% of CME Group shares are owned by company insiders. Comparatively, 23.2% of KKR & Co. Inc. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares CME Group and KKR & Co. Inc.”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CME Group	$6.52 billion	15.74	$4.07 billion	$11.79	24.22
KKR & Co. Inc.	$19.46 billion	5.07	$2.37 billion	$3.14	35.03

CME Group has higher earnings, but lower revenue than KKR & Co. Inc.. CME Group is trading at a lower price-to-earnings ratio than KKR & Co. Inc., indicating that it is currently the more affordable of the two stocks.

Dividends

CME Group pays an annual dividend of $5.20 per share and has a dividend yield of 1.8%. KKR & Co. Inc. pays an annual dividend of $0.78 per share and has a dividend yield of 0.7%. CME Group pays out 44.1% of its earnings in the form of a dividend. KKR & Co. Inc. pays out 24.8% 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. KKR & Co. Inc. has increased its dividend for 5 consecutive years.

Summary

KKR & Co. Inc. beats CME Group on 9 of the 17 factors compared between the two stocks.

About CME Group

CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, as well as fixed income and foreign currency trading services. The company also provides clearing house services, including clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges; and trade processing and risk mitigation services. In addition, the company offers a range of market data services, including real-time and historical data services. It serves professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. The company was founded in 1898 and is headquartered in Chicago, Illinois.

About KKR & Co. Inc.

KKR & Co., Inc. operates as an investment firm. It offers alternative asset management as well as capital markets and insurance solutions. The firm’s business segments include Asset Management and Insurance Business. The Asset Management segment engages in providing private equity, real assets, credit and liquid strategies, capital markets, and principal activities. The Insurance Business segment offers retirement, life insurance and reinsurance solutions to clients across individual and institutional markets. The company was founded by Henry Kravis, George R. Roberts, and Jerome Kholberg on May 1, 1976 and is headquartered in New York, NY.