Don't Buy the Market, Buy the Exchange! NYSE EuroNext (NYX)

Stock exchange operator NYSE EuroNext (NYX) may be the source of much volatility over the past few years, but the company itself yields over 4% in dividends.

It has been a volatile few years for equity markets across the globe and that has meant that the man in street is wary of the stock exchange. 2008 was a global lost year that saw many trillions wiped out around the world.
In saying that, investors looking for income might actually find the exchange itself an interesting proposition. In particular, NYSE Euronext (NYX), the company created by the combination of NYSE Group, Inc. and Euronext N.V., sits on a 4.16% dividend yield.
Launched in April 4, 2007 the company comprises exchanges operating across the globe offering equities, futures, options, fixed-income and exchange-traded products.
Despite the financial crisis during 2008, 42% of the world’s cash equities trading volume took place on NYSE Euronext (NYX) exchanges and the company remains the world’s leading marketplace for global Initial Public Offerings (IPO's), raising $26bn.
NYSE Euronext is unquestionably a market leader, and while the company is a relatively new offering, it has set a high benchmark with a dividend yield in excess of 4%.
Trading volumes for April 2010 indicate that there is increasing appetite for risk in the various markets. European derivatives average daily volume increased 51.5%, driven in part by a 47% increase in fixed income derivatives product while in the US, options volumes increased 62%.
Reporting for the first quarter of 2010, the company saw net income of $130 million, or $0.50 per diluted share. A quarterly dividend of $0.30 per share was declared.
In the most recent quarterly results, management said, “In the first quarter, we continued to execute on those areas of our business we can control and are seeing tangible results. Our new businesses are driving increased revenue, we reduced costs by 10% on a constant dollar, constant portfolio basis and we continued to de-lever with debt to EBITDA levels declining to 2.4 times, down from 2.6 times at the end of 2009. Lastly, the additional transparency of our new segment reporting has served to highlight the strength and diversification of NYSE Euronext (NYX) for the investment community."
The company has also managed to reduce its net debt position by $103 million and has also realized its stake in the National Stock Exchange of India for $175 million, indicating it will use this cash to further pay down its debt obligations.
For investors who are looking for a share which is geared to the market, NYSE EuroNext (NYX) may be a great aggressive dividend play.
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