CME Group: A Financial Intermediary With De Facto Monopolies

Dividend | Stock | Investing | Valuation

CME Group (CME) is a financial intermediary with quasi-monopolies on various trading vehicles. The exchanges, such as CME Group, are interesting businesses because they require little in the form of capital investments and once an financial product becomes ingrained it becomes a de-facto monopoly as liquidity drives trading volumes.

The bulk of CME Group's revenues are derived from the trading volumes across their various financial products. CME Group has a wide range of products that are each quasi-monopolies that cover all major asset classes including agriculture products, energy, equities and indexes, interest rates, fixed income products, and industrial and precious metals.

CME Group also generates revenues through their data and information services segment.

Dividend History

Businesses that have a history of both paying and growing their dividend payment allow me to sleep better at night knowing that I'm getting to enjoy the fruits of their labor with cold, hard cash coming into my account. Its akin to the having an apple tree where you have the option to eat the apples each year, but you can only use the lumber from the tree just once.

Dividends | Stocks | Investing

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