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CME Joins Early Dividend Payers to Avoid Possibly Higher Taxes

CME Group (CME) said it would pay its annual, variable dividend early, on Dec. 28, so shareholders could avoid a potentially higher tax bill. The dividend is $1.30 a share and comes on top of quarterly payouts CME makes.

It instituted the annual variable dividend not quite a year ago – setting the payout rate after the year’s business was concluded, and variable to reflect the year's profits – with a 60-cent payout in March of this year.

Most recently, CME has been paying 45 cents as a quarterly dividend. CME has plenty of cash on hand.

CME Cash and ST Investments  Chart

CME Cash and ST Investments data by YCharts

A lack of interest rate volatility, since the 2008-2009 financial crisis, has dampened demand for CME's hedging products. With the Fed committed to super-low rates for the near future, that seems unlikely to change.

CME Revenue Quarterly Chart

CME Revenue Quarterly data by YCharts

CME, which operates exchanges including the Chicago Mercantile Exchange and the Chicago Board of Trade, joins other large companies in moving to pre-empt any fiscal cliff-related tax hike on dividends, currently taxed at 15%. Wal-Mart (WMT), Costco (COST) and Las Vegas Sands (LVS) all accelerated some dividends.

From the editors of YCharts.

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