Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0789
    -0.0005 (-0.04%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2612
    -0.0010 (-0.08%)
     
  • USD/JPY

    151.3100
    -0.0620 (-0.04%)
     
  • Bitcoin USD

    70,128.56
    -582.15 (-0.82%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

Why It's Worth Betting on Intercontinental (ICE) Stock Now

Intercontinental Exchange, Inc.’s ICE solid portfolio, expansive risk management services, strategic buyouts, solid balance sheet and effective capital deployment along with favorable growth estimates make it a good investment choice.

Growth Projections

The Zacks Consensus Estimate for Intercontinental Exchange’s 2021 and 2022 earnings per share is pegged at $5.09 and $5.54, indicating a year-over-year increase of 12.9% and 8.7%, respectively.

Estimate Revision

The Zacks Consensus Estimate for 2021 and 2022 has moved north by 1 cent each in the past 30 days, reflecting analyst optimism.

Earnings Surprise History

Intercontinental Exchange has a decent surprise history, having surpassed estimates in three of the last four reported quarters and missing in one, with the average beat being 3.11%.

Zacks Rank & Price Performance

Intercontinental Exchange currently carries a Zacks Rank #2 (Buy). Year to date, the stock has rallied 11.9% compared with the industry’s increase of 29%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Return on Equity (ROE)

The company’s ROE for the trailing 12 months is 13.6%, better than the industry average of 13.5%, reflecting the company’s efficiency in utilizing shareholders’ fund. The company aims to generate solid mid-teens returns for its shareholders.

Business Tailwinds

Intercontinental Exchange’s top line should continue to benefit from its expansive product and service portfolio. ICE estimates fourth-quarter 2021 revenues between $892 and $907 million.

Given compelling global data services, management estimates recurring revenues in the Fixed Income and Data Services segment to improve sequentially to a range of $415 million to $420 million

Exchange segment revenues are estimated between $330 million and $335 million for the fourth quarter of 2021.

Being the largest mortgage network across the United States, Intercontinental Exchange is poised to benefit from accelerated digitization in the U.S. residential mortgage industry. Thus, ICE Mortgage Technology is estimated to generate revenues in the range of $147 million to $152 million in the fourth quarter of 2021, implying 25% growth year over year.

Also, with over 5,000 indices representing more than $1 trillion in benchmark assets under management, Intercontinental boasts being the second-largest fixed income provider globally.

Intercontinental Exchange has strong liquidity and capital position and has also been effectively lowering leverage ratios. It plans to invest $25 million to $30 million in 2021 to enhance its Mortgage Technology platforms.

Dividend History

Intercontinental Exchange hiked its dividend by 10% in July 2021 and currently yields 1.2%, better than the industry average of 1%. This makes the stock an attractive pick for yield-seeking investors.

Attractive Valuation

Price to forward 12-months forward earnings is pegged at 23.46, lower than the industry average of 29.7.

Other Stocks to Consider

Some other top-ranked stocks include OTC Markets Group OTCM, Cboe Global Markets CBOE and Cincinnati Financial Corporation CINF.

OTC Markets Group sports a Zack Rank #1 (Strong Buy). The Zacks Consensus Estimate for OTC Markets Group’s 2021 and 2022 has moved up 8.3% and 14.9% in the past 30 days. The expected long-term earnings growth rate is pegged at 9%, in line with the industry average.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Cboe Global carries a Zack Rank #2. The Zacks Consensus Estimate for Cboe Global’s 2021 and 2022 has moved up 0.2% and 0.8% in the past 30 days.

Cincinnati Financial carries a Zacks Rank #2. The Zacks Consensus Estimate for Cincinnati Financial’s 2021 and 2022 has moved up 0.9% and 5% in the past 30 days.

Shares of OTCM, CBOE and CINF have gained 72.2%, 36.5% and 29.1%, respectively year to date.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report

OTC Markets Group Inc. (OTCM) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Advertisement