Financial Comparison: MarketWise (NASDAQ:MKTW) and CME Group (NASDAQ:CME)

MarketWise (NASDAQ:MKTW) and CME Group (NASDAQ:CME) are both financial services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Dividends

MarketWise pays an annual dividend of $0.04 per share and has a dividend yield of 6.9%. CME Group pays an annual dividend of $4.60 per share and has a dividend yield of 2.0%. MarketWise pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CME Group pays out 52.3% of its earnings in the form of a dividend. CME Group has increased its dividend for 14 consecutive years.

Earnings and Valuation

This table compares MarketWise and CME Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MarketWise	$432.34 million	0.44	$1.78 million	$0.04	14.44
CME Group	$5.80 billion	14.04	$3.23 billion	$8.79	25.73

CME Group has higher revenue and earnings than MarketWise. MarketWise is trading at a lower price-to-earnings ratio than CME Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for MarketWise and CME Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MarketWise	0	1	1	0	2.50
CME Group	4	7	4	0	2.00

MarketWise presently has a consensus price target of $2.50, indicating a potential upside of 332.75%. CME Group has a consensus price target of $222.07, indicating a potential downside of 1.80%. Given MarketWise’s stronger consensus rating and higher probable upside, research analysts plainly believe MarketWise is more favorable than CME Group.

Profitability

This table compares MarketWise and CME Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MarketWise	0.80%	-1.30%	0.91%
CME Group	56.98%	12.82%	2.75%

Institutional & Insider Ownership

23.0% of MarketWise shares are owned by institutional investors. Comparatively, 87.8% of CME Group shares are owned by institutional investors. 28.6% of MarketWise shares are owned by company insiders. Comparatively, 0.3% of CME Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

MarketWise has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, CME Group has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Summary

CME Group beats MarketWise on 13 of the 17 factors compared between the two stocks.

About MarketWise

MarketWise, Inc. operates a content and technology multi-brand platform for self-directed investors in the United States and Internationally. Its platform includes subscription businesses that provides financial research, software, education, and tools to navigate the financial markets. The company offers various investment strategies, such as value investing, income, growth, commodities, cryptocurrencies, venture, crowdfunded investing, biotechnology, mutual funds, options, and trading; investment research product portfolio through a range of media, including desktops, laptops, tablets, and mobile; and financial newsletters. It provides a suite of stock research tools and portfolio management services under the Chaikin Analytics brand; portfolio management software tools under the TradeSmith brand name; and database of accounting-based financial summaries under the Altimetry brand. In addition, the company develops screeners, monitors, portfolio management tools, and proprietary indicators that produce a composite score to rank publicly traded companies. The company was founded in 1999 and is headquartered in Baltimore, Maryland.

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.