CME vs PRA Which Should You Buy?

CME Group and ProAssurance Corporation are two companies operating in very different sectors of the financial market. CME Group specializes in providing a wide range of financial derivatives products and services, while ProAssurance Corporation focuses on providing professional liability insurance primarily to healthcare professionals. Both companies have strong track records of performance and profitability, making them attractive investments for different types of investors. Understanding the differences between CME and PRA stocks can help investors make informed decisions about their investment portfolios.

CME or PRA?

When comparing CME and PRA, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between CME and PRA.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. CME has a dividend yield of 4.12%, while PRA has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CME reports a 5-year dividend growth of 16.23% year and a payout ratio of 103.88%. On the other hand, PRA reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with CME P/E ratio at 25.05 and PRA's P/E ratio at 19.23. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CME P/B ratio is 3.05 while PRA's P/B ratio is 0.68.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CME has seen a 5-year revenue growth of 0.23%, while PRA's is 0.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CME's ROE at 12.51% and PRA's ROE at 3.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $234.94 for CME and $20.93 for PRA. Over the past year, CME's prices ranged from $190.70 to $249.02, with a yearly change of 30.58%. PRA's prices fluctuated between $18.64 and $31.43, with a yearly change of 68.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.