Fear is a growth industry. CME owns the toll booth.
Owner’s earnings (last 3 years, 2023 to 2025): about 16.7% a year. That is average earnings per share growth of 14.8% plus an average dividend yield of 2.0%, counting the regular dividend only. History, not a forecast.
CME runs the exchange where the world trades futures on interest rates, stock indexes, energy, metals and crops. It does not care who wins the trade. It collects the toll either way.
Protection Against AI
AI can trade faster than any human. It still needs somewhere to trade and someone to clear it. CME owns both, along with the liquidity that makes its contracts the benchmark. More machines trading more often is more toll, not less. CME is even proposing futures on compute.
Last quarter was a record third quarter: 29.4 million contracts a day, revenue of $1.7 billion, and an adjusted operating margin of 69.4%. That is not a typo.
Three drivers.
1. Uncertainty is the product
Volume grew 16% from a year ago, with double-digit growth in all six asset classes. International volume grew 22% to 9 million contracts a day. Open interest ended the quarter at a record 128 million contracts. Nobody has to be right about rates, oil or the election. They just have to be unsure.
2. Data and pricing
Market data revenue hit a record $243 million, up 20%. That is 34 straight quarters of year-over-year growth. On top of that, announced pricing changes are expected to lift clearing and transaction fees by 0.5% to 1%. Small price increases on a 69% margin business go a long way.
3. A business that does not need the cash
CME returned nearly $1 billion to shareholders in the quarter: $465 million in regular dividends and $524 million in buybacks. It ended the quarter with $2.4 billion in cash against $3.4 billion of debt. No factories, no inventory. Just a very busy toll booth.
Downside Risk of Model
Calm markets. Volume is the business, and volume falls when the world relaxes. Add fee pressure from competitors and the usual regulatory risk.
Bottom line
CME is a toll booth on global risk management with a 69% margin and nothing to spend the cash on except its owners.
Best,
Brad
Yield at the November 4, 2026 price. Company figures from CME Group’s Q3 2026 earnings release and call, October 21, 2026. General research, not personal advice. Evergreen, its principals or clients may own securities discussed.