How to buy Intercontinental Exchange shares

Is it a good time to buy Intercontinental Exchange stock?

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Is Intercontinental Exchange under- or over-valued?

Valuing Intercontinental Exchange stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Intercontinental Exchange’s overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.

Intercontinental Exchange’s P/E ratio

Intercontinental Exchange’s current share price divided by its per-share earnings (EPS) over a 12-month period gives a “trailing price/earnings ratio” of roughly 30x. In other words, Intercontinental Exchange shares trade at around 30x recent earnings.

That’s relatively high compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they’re over-valued.

Intercontinental Exchange’s PEG ratio

Intercontinental Exchange’s “price/earnings-to-growth ratio” can be calculated by dividing its P/E ratio by its growth – to give 2.0314. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.

The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into Intercontinental Exchange’s future profitability. By accounting for growth, it could also help you if you’re comparing the share prices of multiple high-growth companies.

Intercontinental Exchange’s EBITDA

Intercontinental Exchange’s EBITDA (earnings before interest, taxes, depreciation and amortisation) is US$3.7 billion (£2.7 billion).

The EBITDA is a measure of a Intercontinental Exchange’s overall financial performance and is widely used to measure a its profitability.

Shorting Intercontinental Exchange shares

There are currently 6.0 million Intercontinental Exchange shares held short by investors – that’s known as Intercontinental Exchange’s “short interest”. This figure is 26.5% up from 4.7 million last month.

There are a few different ways that this level of interest in shorting Intercontinental Exchange shares can be evaluated.

Intercontinental Exchange’s “short interest ratio” (SIR)

Intercontinental Exchange’s “short interest ratio” (SIR) is the quantity of Intercontinental Exchange shares currently shorted divided by the average quantity of Intercontinental Exchange shares traded daily (recently around 2.6 million). Intercontinental Exchange’s SIR currently stands at 2.29. In other words for every 100,000 Intercontinental Exchange shares traded daily on the market, roughly 2290 shares are currently held short.

However Intercontinental Exchange’s short interest can also be evaluated against the total number of Intercontinental Exchange shares, or, against the total number of tradable Intercontinental Exchange shares (the shares that aren’t held by “insiders” or major long-term shareholders – also known as the “float”). In this case Intercontinental Exchange’s short interest could be expressed as 0.01% of the outstanding shares (for every 100,000 Intercontinental Exchange shares in existence, roughly 10 shares are currently held short) or 0.0108% of the tradable shares (for every 100,000 tradable Intercontinental Exchange shares, roughly 11 shares are currently held short).

Such a low SIR usually points to an optimistic outlook for the share price, with fewer people currently willing to bet against Intercontinental Exchange.

Find out more about how you can short Intercontinental Exchange stock.

Intercontinental Exchange’s environmental, social and governance track record

Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like Intercontinental Exchange.

When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.

Intercontinental Exchange’s total ESG risk score

Total ESG risk: 17.49

Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and Intercontinental Exchange’s overall score of 17.49 (as at 01/01/2019) is excellent – landing it in it in the 13rd percentile of companies rated in the same sector.

ESG scores are increasingly used to estimate the level of risk a company like Intercontinental Exchange is exposed to within the areas of “environmental” (carbon footprint, resource use etc.), “social” (health and safety, human rights etc.), and “governance” (anti-corruption, tax transparency etc.).

Intercontinental Exchange’s environmental score

Environmental score: 7.12/100

Intercontinental Exchange’s environmental score of 7.12 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that Intercontinental Exchange is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.

Intercontinental Exchange’s social score

Social score: 10.05/100

Intercontinental Exchange’s social score of 10.05 puts it squarely in the 6th percentile of companies rated in the same sector. This could suggest that Intercontinental Exchange is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.

Intercontinental Exchange’s governance score

Governance score: 12.32/100

Intercontinental Exchange’s governance score puts it squarely in the 6th percentile of companies rated in the same sector. That could suggest that Intercontinental Exchange is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.

Intercontinental Exchange’s controversy score

Controversy score: 3/5

ESG scores also evaluate any incidences of controversy that a company has been involved in. Intercontinental Exchange scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that Intercontinental Exchange hasn’t always managed to keep its nose clean.

Intercontinental Exchange share dividends

Dividend payout ratio: 27.27% of net profits

Recently Intercontinental Exchange has paid out, on average, around 27.27% of net profits as dividends. That has enabled analysts to estimate a “forward annual dividend yield” of 1.14% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), Intercontinental Exchange shareholders could enjoy a 1.14% return on their shares, in the form of dividend payments. In Intercontinental Exchange’s case, that would currently equate to about $1.2 per share.

While Intercontinental Exchange’s payout ratio might seem fairly standard, it’s worth remembering that Intercontinental Exchange may be investing much of the rest of its net profits in future growth.

Intercontinental Exchange’s most recent dividend payout was on 31 March 2021. The latest dividend was paid out to all shareholders who bought their shares by 15 June 2021 (the “ex-dividend date”).

Have Intercontinental Exchange’s shares ever split?

Intercontinental Exchange’s shares were split on a 5:1 basis on 4 November 2016. So if you had owned 1 share the day before before the split, the next day you’d have owned 5 shares. This wouldn’t directly have changed the overall worth of your Intercontinental Exchange shares – just the quantity. However, indirectly, the new 80% lower share price could have impacted the market appetite for Intercontinental Exchange shares which in turn could have impacted Intercontinental Exchange’s share price.

Intercontinental Exchange share price volatility

Over the last 12 months, Intercontinental Exchange’s shares have ranged in value from as little as US$62.7614 up to US$118.6804. A popular way to gauge a stock’s volatility is its “beta”.

Beta is a measure of a share’s volatility in relation to the market. The market (NYSE average) beta is 1, while Intercontinental Exchange’s is 0.7048. This would suggest that Intercontinental Exchange’s shares are less volatile than average (for this exchange).

Intercontinental Exchange overview

Intercontinental Exchange, Inc. operates regulated exchanges, clearing houses, and listings venues for commodity, financial, fixed income, and equity markets in the United States, the United Kingdom, the European Union, Singapore, Israel, and Canada. It operates through three segments: Exchanges, Fixed Income and Data Services, and Mortgage Technology. The company operates marketplaces for listing, trading, and clearing an array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange, and equities, as well as corporate and exchange-traded funds; trading venues, including 12 regulated exchanges and six clearing houses; and offers futures and options products for energy, agricultural and metals, financial, cash equities and equity, over-the-counter, and other markets, as well as listings and data and connectivity services. It also provides fixed income data and analytic, fixed income execution, CDS clearing, and other multi-asset class data and network services. In addition, the company offers proprietary and comprehensive mortgage origination platform, which serves residential mortgage loans; network and closing solutions that provides customers connectivity to the mortgage supply chain and facilitates the secure exchange of information; data and analytics services; and Data as a Service for lenders to access data and origination information. Intercontinental Exchange, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.

Frequently asked questions

• 
  What percentage of Intercontinental Exchange is owned by insiders or institutions?
  
  

  Currently 1.415% of Intercontinental Exchange shares are held by insiders and 93.986% by institutions.

• 
  When does the fiscal year end for Intercontinental Exchange?
  
  

  Intercontinental Exchange’s fiscal year ends in December.

• 
  Where is Intercontinental Exchange based?
  
  

  Intercontinental Exchange’s address is: 5660 New Northside Drive NW, Atlanta, GA, United States, 30328

• 
  What is Intercontinental Exchange’s ISIN number?
  
  

  Intercontinental Exchange’s international securities identification number is: US45866F1049

• 
  What is Intercontinental Exchange’s CUSIP number?
  
  

  Intercontinental Exchange’s Committee on Uniform Securities Identification Procedures number is: 45865V100