CME Bonds

CME -  USA Stock  

USD 188.69  0.27  0.14%

CME's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. CME's financial risk is the risk to CME stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Continue to the analysis of CME Fundamentals Over Time.

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CME Debt Current is projected to increase significantly based on the last few years of reporting. The past year's Debt Current was at 86.78 Billion

CME Current Financial Burden

CME's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. CME's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps CME Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect CME's stakeholders.

Asset vs Debt

Equity vs Debt

For most companies, including CME, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running CME Group the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Given that CME's debt-to-equity ratio measures a company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which CME is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of CME to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, CME is said to be less leveraged. If creditors hold a majority of CME's assets, the company is said to be highly leveraged.

CME Quarterly Debt to Equity Ratio

5.676Share
Given the importance of CME's capital structure, the first step in the capital decision process is for the management of CME to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of CME Group to issue bonds at a reasonable cost.

CME Bond Ratings

CME Group bond ratings play a critical role in determining how much CME have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for CME's borrowing costs.
Overall Bond Rating
Very Strong
Average S&P Rating
AA-
Piotroski F Score
4  Poor
Beneish M Score

CME Group Debt to Cash Allocation

As CME Group follows its natural business cycle, the capital allocation decisions will not magically go away. CME's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company has 4.07 B in debt with debt to equity (D/E) ratio of 0.15, which may show that the company is not taking advantage of profits from borrowing. CME Group has a current ratio of 1.0, demonstrating that it is in a questionable position to pay out its financial commitments when the payables are due.

CME Receivables Over Time

CME Assets Financed by Debt

The debt-to-assets ratio shows the degree to which CME uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

CME Debt Ratio

    
  93.53   
It looks as if most of the CME's assets are financed through debt. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the CME's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of CME, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a CME debt ratio should be compared their industry average or other competing firms.
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CME Corporate Bonds Issued

CME issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. CME Group uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most CME bonds can be classified according to their maturity, which is the date when CME Group has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Issue DateMaturityCouponRef Coupon  Rating
CME GROUP INC09/10/201209/15/20223.02.0
AA-
CME GROUP INC09/09/201309/15/20435.33.0
AA-
CME GROUP INC03/09/201503/15/20253.02.0
AA-

CME Group Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of CME, understanding its historical liability is critical in projecting CME's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how CME uses its financing power over time.

Understaning CME Use of Financial Leverage

CME financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures CME's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of CME assets, the company is considered highly leveraged. Understanding the composition and structure of overall CME debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
Please read more on our technical analysis page.
Last ReportedProjected for 2021
Total Debt90.2 B97.3 B
Debt Current86.8 B93.6 B
Debt Non Current3.4 B3.3 B
Issuance Repayment of Debt Securities-304.6 M-312.6 M
Long Term Debt to Equity 0.13  0.12 
Debt to Equity Ratio 3.73  3.08 
CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. CME Group Inc. was founded in 1898 and is headquartered in Chicago, Illinois. CME operates under Financial Data Stock Exchanges classification in the United States and is traded on NASDAQ Exchange. It employs 4370 people.

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Our tools can tell you how much better you can do entering a position in CME without increasing your portfolio risk or giving up expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate.risk-adjusted returns of your individual positions relative to your overall portfolio.

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Pair Trading with CME

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if CME position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CME will appreciate offsetting losses from the drop in the long position's value.

CME Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for CME and Factset Research Systems. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
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Continue to the analysis of CME Fundamentals Over Time. Note that the CME Group information on this page should be used as a complementary analysis to other CME's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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When running CME Group price analysis, check to measure CME's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy CME is operating at the current time. Most of CME's value examination focuses on studying past and present price action to predict the probability of CME's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move CME's price. Additionally, you may evaluate how the addition of CME to your portfolios can decrease your overall portfolio volatility.
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The market value of CME Group is measured differently than its book value, which is the value of CME that is recorded on the company's balance sheet. Investors also form their own opinion of CME's value that differs from its market value or its book value, called intrinsic value, which is CME's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because CME's market value can be influenced by many factors that don't directly affect CME Group underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between CME's value and its price as these two are different measures arrived at by different means. Investors typically determine CME value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, CME's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.