Intercontinental Exchange vs CME Which Is a Smarter Choice?

Intercontinental Exchange (ICE) and CME Group are two of the largest and most prominent exchanges in the world. Both companies operate in the financial services industry, offering a wide range of products and services to their clients. ICE primarily focuses on energy and commodity trading, while CME Group is known for its diverse portfolio of futures and options contracts. Investors looking to diversify their portfolios may consider comparing these two stocks to determine which offers the most potential for growth and stability.

Intercontinental Exchange or CME?

When comparing Intercontinental Exchange and CME, 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 Intercontinental Exchange and CME.

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. Intercontinental Exchange has a dividend yield of 0.87%, while CME has a dividend yield of 4.15%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Intercontinental Exchange reports a 5-year dividend growth of 11.84% year and a payout ratio of 42.07%. On the other hand, CME reports a 5-year dividend growth of 16.23% year and a payout ratio of 103.88%.

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 Intercontinental Exchange P/E ratio at 36.77 and CME's P/E ratio at 24.84. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Intercontinental Exchange P/B ratio is 3.28 while CME's P/B ratio is 3.02.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Intercontinental Exchange has seen a 5-year revenue growth of 0.61%, while CME's is 0.23%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Intercontinental Exchange's ROE at 9.18% and CME's ROE at 12.51%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $155.43 for Intercontinental Exchange and $234.08 for CME. Over the past year, Intercontinental Exchange's prices ranged from $121.56 to $167.99, with a yearly change of 38.20%. CME's prices fluctuated between $190.70 and $249.02, with a yearly change of 30.58%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.