OTCM OTC Markets Group Inc (QX)

EDISON EQUITY RESEARCH:OTC MARKETS GROUP - GROWTH AND A SPECIAL DIVIDEND

OTC Markets Group (OTCQX: OTCM) continues to benefit from its initiative to create a US venture market to rival AIM in the UK and TSX Venture in Canada. Revenues continued to rise in Q315 and operational gearing led to a higher operating margin. OTCM has net cash on its balance sheet and is generating considerable cash from its business. It has announced a special dividend for 2015, having also paid one in 2014. OTCM is trading on a yield of 7.4% for 2015 and 3.7% excluding the special dividend. It is also trading below our DCF valuation.

OTC Markets Group (OTCM) operates the OTCQX Best Market, OTCQB Venture Market and OTC Pink financial market for 10,000 US and global securities. Its trading system OTC Link ATS is operated by OTC Link LLC, a member of FINRA/SIPC and SEC regulated ATS. Its markets offer a cost-effective solution for targeting US investors.

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