Critical Comparison: Galaxy Digital (NASDAQ:GLXY) versus CME Group (NASDAQ:CME)

Galaxy Digital (NASDAQ:GLXY) and CME Group (NASDAQ:CME) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

This table compares Galaxy Digital and CME Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Galaxy Digital	-0.75%	-6.25%	-1.67%
CME Group	63.30%	15.60%	2.20%

Volatility & Risk

Galaxy Digital has a beta of 5.1, suggesting that its stock price is 410% more volatile than the S&P 500. Comparatively, CME Group has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500.

Earnings and Valuation

This table compares Galaxy Digital and CME Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Galaxy Digital	$61.36 billion	0.17	-$241.35 million	($0.65)	-40.51
CME Group	$6.52 billion	15.51	$4.07 billion	$11.79	23.86

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

Institutional & Insider Ownership

87.7% of CME Group shares are held by institutional investors. 51.5% of Galaxy Digital shares are held by company insiders. Comparatively, 0.3% of CME Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Galaxy Digital and CME Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Galaxy Digital	2	2	10	0	2.57
CME Group	3	6	9	0	2.33

Galaxy Digital currently has a consensus target price of $39.58, suggesting a potential upside of 50.34%. CME Group has a consensus target price of $289.75, suggesting a potential upside of 3.01%. Given Galaxy Digital’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Galaxy Digital is more favorable than CME Group.

Summary

CME Group beats Galaxy Digital on 8 of the 14 factors compared between the two stocks.

About Galaxy Digital

Galaxy Digital Holdings Ltd. is a financial services and an investment management company, which engages in the digital asset, cryptocurrency, and block chain technology sectors. It operates through the following segments: Trading, Principal Investment, Asset Management, Investment Banking, Mining, and Corporate & Other. The Trading segment manages positions in cryptocurrency and other liquid digital assets contributed to the business at the outset and continues to invest and trade in those and related assets. The Principal Investment segment includes portfolio of private principal investments across the block chain ecosystem, including early- and later-stage equity, pre-launch network contributions, and other structured alternative investments. The Asset Management segment manages capital on behalf of third parties in exchange for management fees and performance-based compensation. The Investment Banking segment offers the spectrum of investment banking, including, but not limited to general corporate advisory, mergers and acquisition, transaction advisory, restructuring and capital rising. The Mining segment focuses to provide financial services for North American miners, through its partnerships. The Corporate & Other consists of the partnership’s unallocated corporate overhead and other unallocated costs not identifiable to any of the reportable segments. The company was founded by Michael Edward Novogratz on February 10, 2006 and is headquartered in New York, NY.

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.