CME Group (NASDAQ:CME – Get Free Report) and MarketWise (NASDAQ:MKTW – Get Free Report) are both financial services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.
Analyst Ratings
This is a summary of current recommendations for CME Group and MarketWise, as provided by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
CME Group | 4 | 7 | 4 | 0 | 2.00 |
MarketWise | 0 | 1 | 1 | 0 | 2.50 |
CME Group currently has a consensus target price of $222.07, suggesting a potential downside of 1.80%. MarketWise has a consensus target price of $2.50, suggesting a potential upside of 332.75%. Given MarketWise’s stronger consensus rating and higher possible upside, analysts plainly believe MarketWise is more favorable than CME Group.
Dividends
Institutional & Insider Ownership
87.8% of CME Group shares are owned by institutional investors. Comparatively, 23.0% of MarketWise shares are owned by institutional investors. 0.3% of CME Group shares are owned by insiders. Comparatively, 28.6% of MarketWise shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares CME Group and MarketWise’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
CME Group | 56.98% | 12.82% | 2.75% |
MarketWise | 0.80% | -1.30% | 0.91% |
Volatility and Risk
CME Group has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, MarketWise has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.
Earnings and Valuation
This table compares CME Group and MarketWise”s gross revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
CME Group | $5.80 billion | 14.04 | $3.23 billion | $8.79 | 25.73 |
MarketWise | $432.34 million | 0.44 | $1.78 million | $0.04 | 14.44 |
CME Group has higher revenue and earnings than MarketWise. MarketWise is trading at a lower price-to-earnings ratio than CME Group, indicating that it is currently the more affordable of the two stocks.
Summary
CME Group beats MarketWise on 13 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 MarketWise
MarketWise, Inc. operates a content and technology multi-brand platform for self-directed investors in the United States and Internationally. Its platform includes subscription businesses that provides financial research, software, education, and tools to navigate the financial markets. The company offers various investment strategies, such as value investing, income, growth, commodities, cryptocurrencies, venture, crowdfunded investing, biotechnology, mutual funds, options, and trading; investment research product portfolio through a range of media, including desktops, laptops, tablets, and mobile; and financial newsletters. It provides a suite of stock research tools and portfolio management services under the Chaikin Analytics brand; portfolio management software tools under the TradeSmith brand name; and database of accounting-based financial summaries under the Altimetry brand. In addition, the company develops screeners, monitors, portfolio management tools, and proprietary indicators that produce a composite score to rank publicly traded companies. The company was founded in 1999 and is headquartered in Baltimore, Maryland.
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