CME Group Announces $2.1B Annual Variable Dividend and $3B Share Repurchase Program

Rhea-AI Summary

CME Group has announced two major shareholder return initiatives. The Board declared a $5.80 per share annual variable dividend for 2024, totaling approximately $2.1 billion, payable January 16, 2025. Additionally, they authorized a $3 billion share repurchase program for Class A common stock.

The combined quarterly and variable dividends announced in 2024 represent a 4.9% total yield based on 2024's average stock price, marking an 8% increase from 2023. Since 2012, CME Group has paid over $28 billion in dividends. Starting 2026, the annual variable dividend payment will align with the first quarter regular dividend in March rather than year-end.

Positive

• Authorization of $3B share repurchase program
• Annual variable dividend of $2.1B ($5.80 per share)
• 8% increase in dividend yield compared to 2023
• 4.9% total dividend yield for 2024

Negative

• None.

Insights

Financial Analyst

This substantial capital return initiative signals strong financial health and shareholder commitment from CME Group. The $2.1 billion variable dividend ($5.80 per share) combined with the $3 billion share repurchase program represents a significant capital return strategy. The total dividend yield of 4.9% for 2024 shows an 8% increase from 2023, demonstrating growing shareholder returns.

The flexible repurchase program without a fixed end date provides strategic advantages, allowing CME to opportunistically buy back shares based on market conditions. Since 2012, CME has returned over $28 billion through dividends, showcasing consistent capital return capabilities. The shift in variable dividend timing to align with Q1 2026 regular dividends indicates improved operational planning and cash flow management.

Market Research Analyst

This announcement represents a strong positive signal for market confidence in CME Group's business model and future prospects. The substantial buyback program provides a floor for the stock price while offering flexibility in capital allocation. The combination of regular dividends, variable dividends and share repurchases creates a comprehensive shareholder return strategy that caters to different investor preferences.

The timing adjustment for future variable dividends starting 2026 suggests improved alignment with earnings cycles and cash flow patterns. With CME's position as the world's leading derivatives marketplace, these capital return initiatives reflect the company's strong market position and sustainable cash generation capabilities.

CHICAGO, Dec. 5, 2024 /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, announced that its Board of Directors approved two initiatives to return capital to shareholders.

The Board declared the company's 2024 annual variable dividend, amounting to $5.80 per share. The dividend is payable January 16, 2025, to shareholders of record on December 27, 2024, and totals approximately $2.1 billion.

In addition, the Board authorized a share repurchase program of up to $3 billion of CME Group Class A common stock, subject to market conditions. 

"The combination of a flexible share repurchase program with our existing quarterly and annual variable dividend structure allows us to efficiently return capital and addresses the different interests and preferences of our diverse shareholder base," said CME Group Chairman and Chief Executive Officer Terry Duffy.

Including today's announced variable dividend and the previously announced fourth-quarter 2024 dividend of $1.15 per share to be paid in December, the total yield for CME Group dividends announced during 2024 is 4.9% based on the average closing stock price in 2024 to date, an 8% increase from dividends declared in 2023. The company will have paid a total of more than $28 billion in quarterly and variable dividends since adopting the annual variable dividend structure in the beginning of 2012.

CME Group intends to continue its variable dividend structure. However, beginning in 2026, the declaration and payment of the annual variable dividend will align with the first quarter regular dividend paid in March 2026 rather than at the end of the calendar year.

The timing, prices, and sizes of stock purchases under the share repurchase plan will depend upon stock price, general market conditions, and other considerations. The share repurchase plan does not have an end date and does not obligate CME Group to repurchase any specific dollar amount or number of shares of its Class A common stock.

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners. 

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SOURCE CME Group

FAQ

What is the amount of CME Group's 2024 annual variable dividend?

CME Group's 2024 annual variable dividend is $5.80 per share, totaling approximately $2.1 billion.

When will CME Group pay its 2024 variable dividend?

The variable dividend will be paid on January 16, 2025, to shareholders of record on December 27, 2024.

How much is CME Group's new share repurchase program?

CME Group authorized a share repurchase program of up to $3 billion of Class A common stock.

What is CME Group's total dividend yield for 2024?

CME Group's total dividend yield for 2024 is 4.9% based on the average closing stock price in 2024.

When will CME Group change its variable dividend payment schedule?

Starting in 2026, CME Group will align its annual variable dividend payment with the first quarter regular dividend paid in March.