Yahoo Finance CME Group Inc (NASDAQ:CME): What You Have To Know Before Buying For The Upcoming Dividend
If you are interested in cashing in on CME Group Inc’s (NASDAQ:CME) upcoming dividend of US$0.70 per share, you only have 3 days left to buy the shares before its ex-dividend date, 07 September 2018, in time for dividends payable on the 25 September 2018. Is this future income a persuasive enough catalyst for investors to think about CME Group as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
Check out our latest analysis for CME Group
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
Is it paying an annual yield above 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Does earnings amply cover its dividend payments?
Will it be able to continue to payout at the current rate in the future?
How well does CME Group fit our criteria?
The current trailing twelve-month payout ratio for the stock is 20.9%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a higher payout ratio of 86.8%, leading to a dividend yield of around 3.7%. However, EPS is forecasted to fall to $6.64 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.
Compared to its peers, CME Group produces a yield of 3.6%, which is high for Capital Markets stocks but still below the market’s top dividend payers.
Next Steps:
Considering the dividend attributes we analyzed above, CME Group is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for CME’s future growth? Take a look at our free research report of analyst consensus for CME’s outlook.
Valuation: What is CME worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CME is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
