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CME Group Declares 6% Dividend Raise

By Eric Volkman - Feb 4, 2021 at 7:58PM

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The move follows a banner 2020 for the financial markets operator.

Top futures and options market operator CME Group (CME -0.07%) has opted to return a bit more dosh to its shareholders. The company announced that its Q1 dividend will be $0.90 per share, which is 6% higher than its predecessor. The new amount is to be handed out on March 25 to investors of record as of March 10.

Like many financial sector companies, CME doesn't offer a particularly high-yield dividend. The raised payout yields only 1.9%.

That said, the company has been consistent in adding to it. For quite some time, it has tended to raise the dividend at the start of every year. From the beginning of 2011, it has climbed steadily from 0.28 per share to the present level.

A woman looking at a set of indexes and graphs.

Image source: Getty Images.

CME's lift is supported by good fundamentals. In 2020 the company had a fine year; in fact it hit its all-time record for international average daily volume (ADV), a critical metric for its business. That volume reached 5.2 million contracts, a pleasant 8% improvement over 2019's level.

Much of this came from the Asia Pacific region, which saw a robust 20% increase in ADV. Equity index products were particularly hot items in that part of the world.

The coronavirus pandemic has given many derivatives traders more time to work the market, and volatility in many stocks over the course of the year encouraged trading activity. CME quoted its head of international, William Knottenbelt, as saying that "unprecedented market conditions in 2020 created a heightened need for risk management globally."

CME's stock price inched up 0.8% on Thursday following the announcement of the dividend hike. 


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