CBOE Holdings (CBOE) & Nasdaq (NDAQ) Critical Analysis
Nasdaq (NASDAQ: NDAQ) and CBOE Holdings (NASDAQ:CBOE) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitabiliy, risk, analyst recommendations, dividends, valuation and institutional ownership.
Nasdaq pays an annual dividend of $1.52 per share and has a dividend yield of 2.1%. CBOE Holdings pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. Nasdaq pays out 183.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CBOE Holdings pays out 54.6% of its earnings in the form of a dividend.
Risk & Volatility
Nasdaq has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, CBOE Holdings has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.
Institutional and Insider Ownership
75.1% of Nasdaq shares are held by institutional investors. Comparatively, 78.9% of CBOE Holdings shares are held by institutional investors. 1.6% of Nasdaq shares are held by insiders. Comparatively, 1.0% of CBOE Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Nasdaq and CBOE Holdings’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nasdaq||$3.77 billion||3.14||$1.19 billion||$0.83||86.30|
|CBOE Holdings||$842.65 million||12.04||$382.46 million||$1.83||49.48|
Nasdaq has higher revenue and earnings than CBOE Holdings. CBOE Holdings is trading at a lower price-to-earnings ratio than Nasdaq, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and target prices for Nasdaq and CBOE Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nasdaq currently has a consensus price target of $72.88, suggesting a potential upside of 1.74%. CBOE Holdings has a consensus price target of $72.19, suggesting a potential downside of 20.27%. Given Nasdaq’s higher possible upside, equities research analysts clearly believe Nasdaq is more favorable than CBOE Holdings.
This table compares Nasdaq and CBOE Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
CBOE Holdings beats Nasdaq on 10 of the 16 factors compared between the two stocks.
Nasdaq, Inc. (Nasdaq) is a holding company. The Company is a provider of trading, clearing, exchange technology, regulatory, securities listing, information and public company services. It manages, operates and provides its products and services through four segments: Market Services, Corporate Services, Information Services and Market Technology. Its global offerings include trading and clearing across various asset classes, trade management services, data products, financial indexes, capital formation solutions, corporate solutions, and market technology products and services. Its technology markets across the globe, supporting equity derivative trading, clearing and settlement, cash equity trading, fixed income trading and various other functions. Its Market Services segment include its equity derivative trading and clearing, cash equity trading, fixed income clearing corporation and trade management services businesses. Its Corporate Solutions business serves corporate clients.
About CBOE Holdings
CBOE Holdings, Inc. is a holding company. The Company’s principal business is operating markets that offer for trading options on various market indexes (index options), on an exclusive basis, and futures contracts, as well as on non-exclusive multiply listed options, such as options on the stocks of individual corporations (equity options), and options on other exchange-traded products (ETP options), such as exchange-traded funds (ETF options) and exchange-traded notes (ETN options). The Company’s subsidiaries include Chicago Board Options Exchange, Incorporated (CBOE), CBOE Futures Exchange, LLC (CFE), C2 Options Exchange, Incorporated (C2), Market Data Express, LLC and Chicago Options Exchange Building Corporation. The Company operates CBOE, CFE and C2 as stand-alone exchanges. The options contracts listed for trading include options on indexes, equities and ETPs. In addition, the Company provides a marketplace for trading futures contracts through CFE.
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