CME Group

Methodology

CME Group's derivatives exchange operations generate stable transaction fees from futures and options across interest rates, equities, commodities, and FX with minimal capital requirements. The company's monopoly positions in key benchmarks like Eurodollar futures provide pricing power. This calculation works well given high margin recurring revenue, though trading volumes fluctuate significantly with market volatility affecting near-term earnings.

Methodology

CME typically commands moderate premium PEG ratios reflecting steady growth from market share and new products as the dominant derivatives exchange. The company's electronic trading transition and monopoly positions justify premium multiples to other exchanges. Compare to ICE and other exchange operators to assess whether CME's benchmark contract ownership and margin profile warrant its positioning.

Methodology

CME Group's meaningful dividend yield represents a substantial component of total returns supplemented by regular special dividends and buybacks. The company's exceptional cash generation from high-margin exchange operations supports substantial capital returns. PEGY is important for CME investors, as the combination of steady yield and modest growth from derivatives market expansion creates the total return profile for this monopolistic financial infrastructure play.