In an effort to distribute more profit among shareholders, the
board of directors of
CBOE Holdings, Inc
) increased its dividend by 50%. The company will now pay a
quarterly dividend of 18 cents per share, up from 15 cents paid
on Jun 21, 2013.
The newly increased dividend will be paid on Sep 20, 2013 to the
shareholders of record as of Aug 30, 2013. Based on the closing
share price of $49.73 on Jul 30, the increased dividend implies a
dividend yield of 1.4%.
The current dividend yield is better than another securities
MarketAxess Holdings Inc
) yield of 1.0%. It however lags the industry yield of 1.59% and
some of other securities exchanges
CME Group Inc
) with a yield of 2.43% and
NASDAQ OMX Group Inc
) with a yield of 1.6%
The dividend hike was primarily supported by CBOE Holdings's
strong balance sheet and its ability to generate healthy cash
flow. Based on the 87.3 million shares outstanding as of Mar 31,
2013, CBOE Holdings requires $15.7 million for the payment of the
Cash balance at the end of the first quarter stood at nearly
$210.5 million (surging 55% over 2012 end level) while cash from
operations in the first quarter improved 50% year over year to
The recent hike marks the third consecutive year of dividend
increase by CBOE Holdings. Earlier, at July end 2012, the board
had approved a 25% increase, raising the dividend to 15 cents
from 12 cents. Additionally, it also authorized a buyback program
worth $100 million.
CBOE Holdings delivered 10 straight quarters of positive earnings
surprise with an average beat of 7.1% due to the strength of its
proprietary products. We wait to see if the company can continue
with the trend into the second quarter. This is because Expected
Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
) is 0.00% but the stock carries a Zacks Rank #2 (Buy) (Stocks
with Zacks Ranks of #1, #2 and #3 have a significantly higher
chance of beating earnings).
The combination of CBOE Holdings' ESP and Zacks Rank makes
surprise prediction uncertain. The Zacks Consensus Estimate is
currently pegged at 52 cents, up 17.2% year over year.
CBOE HOLDINGS (CBOE): Free Stock Analysis
CME GROUP INC (CME): Free Stock Analysis
MARKETAXESS HLD (MKTX): Free Stock Analysis
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
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