CBOE Holdings (CBOE) & Interactive Brokers Group (IBKR) Head to Head Contrast

CBOE Holdings (NASDAQ: CBOE) and Interactive Brokers Group (NASDAQ:IBKR) are both large-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Profitability

This table compares CBOE Holdings and Interactive Brokers Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBOE Holdings 17.81% 17.45% 9.24%
Interactive Brokers Group 4.97% 1.19% 0.13%

Institutional and Insider Ownership

82.5% of CBOE Holdings shares are owned by institutional investors. Comparatively, 15.0% of Interactive Brokers Group shares are owned by institutional investors. 1.9% of CBOE Holdings shares are owned by company insiders. Comparatively, 3.4% of Interactive Brokers Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares CBOE Holdings and Interactive Brokers Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CBOE Holdings $1.31 billion 9.01 $473.86 million $1.81 57.83
Interactive Brokers Group $1.36 billion 2.20 $73.61 million $1.03 40.66

CBOE Holdings has higher revenue, but lower earnings than Interactive Brokers Group. Interactive Brokers Group is trading at a lower price-to-earnings ratio than CBOE Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and target prices for CBOE Holdings and Interactive Brokers Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBOE Holdings 0 6 8 0 2.57
Interactive Brokers Group 1 4 0 0 1.80

CBOE Holdings presently has a consensus price target of $79.39, indicating a potential downside of 24.15%. Interactive Brokers Group has a consensus price target of $38.60, indicating a potential downside of 7.83%. Given Interactive Brokers Group’s higher probable upside, analysts plainly believe Interactive Brokers Group is more favorable than CBOE Holdings.

Dividends

CBOE Holdings pays an annual dividend of $1.08 per share and has a dividend yield of 1.0%. Interactive Brokers Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. CBOE Holdings pays out 59.7% of its earnings in the form of a dividend. Interactive Brokers Group pays out 38.8% 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.

Volatility and Risk

CBOE Holdings has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Interactive Brokers Group has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

CBOE Holdings beats Interactive Brokers Group on 11 of the 16 factors compared between the two stocks.

About CBOE Holdings

CBOE Holdings, Inc. is a holding company. The Company’s principal business is operating markets that offer for trading options on various market indexes (index options), on an exclusive basis, and futures contracts, as well as on non-exclusive multiply listed options, such as options on the stocks of individual corporations (equity options), and options on other exchange-traded products (ETP options), such as exchange-traded funds (ETF options) and exchange-traded notes (ETN options). The Company’s subsidiaries include Chicago Board Options Exchange, Incorporated (CBOE), CBOE Futures Exchange, LLC (CFE), C2 Options Exchange, Incorporated (C2), Market Data Express, LLC and Chicago Options Exchange Building Corporation. The Company operates CBOE, CFE and C2 as stand-alone exchanges. The options contracts listed for trading include options on indexes, equities and ETPs. In addition, the Company provides a marketplace for trading futures contracts through CFE.

About Interactive Brokers Group

Interactive Brokers Group, Inc. (IBG, Inc.) is a holding company. The Company is an automated global electronic broker and market maker specializing in routing orders, and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on over 120 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers. It operates in two segments: electronic brokerage and market making. It conducts its electronic brokerage business through its Interactive Brokers (IB) subsidiaries. It conducts its market making business through its Timber Hill (TH) subsidiaries. In the United States, it conducts its business from Greenwich, Connecticut and Chicago, Illinois. Outside the United States, it conducts business in Canada, England, Switzerland, Liechtenstein, China (Hong Kong and Shanghai), India, Australia and Japan.

Receive News & Ratings for CBOE Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for CBOE Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply