CBOE Holdings (NASDAQ: CBOE) and Intercontinental Exchange (NYSE:ICE) are both large-cap financial & commodity market operators – nec companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Valuation and Earnings

This table compares CBOE Holdings and Intercontinental Exchange’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
CBOE Holdings $645.11 million 20.51 $185.72 million $1.85 63.03
Intercontinental Exchange $5.96 billion 6.61 $1.42 billion $2.75 24.47

Intercontinental Exchange has higher revenue and earnings than CBOE Holdings. Intercontinental Exchange is trading at a lower price-to-earnings ratio than CBOE Holdings, indicating that it is currently the more affordable of the two stocks.

Dividends

CBOE Holdings pays an annual dividend of $1.08 per share and has a dividend yield of 0.9%. Intercontinental Exchange pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. CBOE Holdings pays out 58.4% of its earnings in the form of a dividend. Intercontinental Exchange pays out 29.1% 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. Intercontinental Exchange has increased its dividend for 3 consecutive years. Intercontinental Exchange is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

CBOE Holdings has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Intercontinental Exchange has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for CBOE Holdings and Intercontinental Exchange, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBOE Holdings 0 6 5 0 2.45
Intercontinental Exchange 0 2 6 0 2.75

CBOE Holdings presently has a consensus price target of $106.67, indicating a potential downside of 8.52%. Intercontinental Exchange has a consensus price target of $72.38, indicating a potential upside of 7.54%. Given Intercontinental Exchange’s stronger consensus rating and higher possible upside, analysts clearly believe Intercontinental Exchange is more favorable than CBOE Holdings.

Insider & Institutional Ownership

81.4% of CBOE Holdings shares are owned by institutional investors. Comparatively, 90.2% of Intercontinental Exchange shares are owned by institutional investors. 1.9% of CBOE Holdings shares are owned by company insiders. Comparatively, 1.5% of Intercontinental Exchange shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares CBOE Holdings and Intercontinental Exchange’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBOE Holdings 10.55% 14.70% 7.83%
Intercontinental Exchange 27.91% 11.01% 2.18%

Summary

Intercontinental Exchange beats CBOE Holdings on 12 of the 17 factors compared between the two stocks.

CBOE Holdings Company Profile

Cboe Global Markets, Inc., formerly 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.

Intercontinental Exchange Company Profile

Intercontinental Exchange Inc, formerly IntercontinentalExchange Group, Inc., is a network of regulated exchanges and clearing houses for financial and commodity markets. The Company delivers transparent and accessible data, technology and risk management services to markets around the world through its portfolio of exchanges, including the New York Stock Exchange, ICE Futures, Liffe and Euronext. In February 2014, the Company completed the acquisition of Singapore Mercantile Exchange. In July 2014, Intercontinental Exchange Inc sold its Wombat Financial Software, a unit of NYSE Technologies. Effective September 10, 2014, Intercontinental Exchange Inc acquired an undisclosed majority interest in Holland Clearing House NV.

Receive News & Ratings for CBOE Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CBOE Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.