CME Group (NASDAQ:CME – Get Free Report) and KKR & Co. Inc. (NYSE:KKR – Get Free Report) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Analyst Recommendations
This is a breakdown of current ratings and price targets for CME Group and KKR & Co. Inc., as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CME Group | 3 | 6 | 9 | 0 | 2.33 |
| KKR & Co. Inc. | 0 | 3 | 12 | 0 | 2.80 |
CME Group currently has a consensus price target of $288.56, suggesting a potential upside of 0.97%. KKR & Co. Inc. has a consensus price target of $130.00, suggesting a potential upside of 19.55%. Given KKR & Co. Inc.’s stronger consensus rating and higher possible upside, analysts plainly believe KKR & Co. Inc. is more favorable than CME Group.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CME Group | $6.52 billion | 15.76 | $4.07 billion | $11.79 | 24.24 |
| KKR & Co. Inc. | $21.06 billion | 4.63 | $2.37 billion | $3.14 | 34.63 |
CME Group has higher earnings, but lower revenue than KKR & Co. Inc.. CME Group is trading at a lower price-to-earnings ratio than KKR & Co. Inc., indicating that it is currently the more affordable of the two stocks.
Dividends
CME Group pays an annual dividend of $5.20 per share and has a dividend yield of 1.8%. KKR & Co. Inc. pays an annual dividend of $0.78 per share and has a dividend yield of 0.7%. CME Group pays out 44.1% of its earnings in the form of a dividend. KKR & Co. Inc. pays out 24.8% 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. KKR & Co. Inc. has raised its dividend for 5 consecutive years.
Profitability
This table compares CME Group and KKR & Co. Inc.’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CME Group | 63.30% | 15.60% | 2.20% |
| KKR & Co. Inc. | 14.41% | 5.88% | 1.07% |
Volatility and Risk
CME Group has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500. Comparatively, KKR & Co. Inc. has a beta of 1.78, meaning that its share price is 78% more volatile than the S&P 500.
Insider and Institutional Ownership
87.7% of CME Group shares are held by institutional investors. Comparatively, 76.3% of KKR & Co. Inc. shares are held by institutional investors. 0.3% of CME Group shares are held by insiders. Comparatively, 23.2% of KKR & Co. Inc. shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
KKR & Co. Inc. beats CME Group on 9 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 KKR & Co. Inc.
KKR & Co., Inc. operates as an investment firm. It offers alternative asset management as well as capital markets and insurance solutions. The firm’s business segments include Asset Management and Insurance Business. The Asset Management segment engages in providing private equity, real assets, credit and liquid strategies, capital markets, and principal activities. The Insurance Business segment offers retirement, life insurance and reinsurance solutions to clients across individual and institutional markets. The company was founded by Henry Kravis, George R. Roberts, and Jerome Kholberg on May 1, 1976 and is headquartered in New York, NY.
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