With these stocks flying under the radar for many investors, we've included a brief rundown of some of the industry's most appealing names to …
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This story originally appeared on MarketBeat
It is a little surprising that capital market stocks are no longer attracting the attention of investors and traders, especially since these companies offer stock exchanges on which financial stocks can be bought and sold. In addition to giving traders the ability to buy and sell things like stocks and bonds, capital markets firms allow companies to raise financial capital in order to grow and play a big role in the global financial system. Most capital market providers generate income from transaction fees and market data, which means that given the importance of these markets to the global economy, they have a lot of profit potential.
Although trading activity slowed somewhat from its rapid pace in 2020, capital market stocks are among the strongest performers in the market this year as major indices continue to slide to new highs. With these stocks staying under the radar for many investors, we've included a brief rundown of some of the most attractive names in the sector. Let's take a look at 3 capital market stocks you can capitalize on right now.
Cboe Global Markets Inc (BATS: CBOE)
If you've ever made a profit by trading options contracts, you probably owe this great options exchange operator to making the transaction easier. Cboe Global Markets is one of the world's largest stock exchange holding companies and the largest options exchange in the United States with a market share of around 40%. The company offers trading in options, futures, US and European stocks, exchange traded products, global forex and multi-asset volatility products based on the VIX index.
This capital market share performed very well in 2021 and has gained over 35% over the year to date. If you think volatility could be on the horizon, this could be a great stock as increasing trading volume would translate into more sales for the company. Keep in mind that CBOE has some of the most popular proprietary products in the trading world, including SPX options and VIX options, which is a huge competitive advantage. Finally, the fact that makes the company's net sales in 2nd ponder.
While it may be difficult to realize that Nasdaq stocks are trading on the Nasdaq Stock Exchange, it is certainly one of the most important capital market stocks to consider long term. The company is a leading provider of trading, clearing, exchange technology, securities listing, data and analytics and is currently benefiting from a hot IPO market and strong trading volumes. The company's index business can also be very popular with investors due to the huge amount of capital that continues to flow into ETFs.
Nasdaq reported strong Q2 earnings back in July, including diluted GAAP earnings per share of $ 2.05, up 41% year over year, on net sales of $ 846 million, up 21% year over year. The company also completed the acquisition of Verafin earlier this year, a pioneer in solutions to fight financial crime. The move expands Nasdaq's business offering and could be a nice growth driver for the company in the future. In a world where data is considered digital gold, a company that offers detailed market data like this really stands out.
With the UBS Group, investors have the opportunity to own one of the best Swiss banks and a real market leader in wealth management. The company operates in five business areas including Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and Investment Bank. It's a diversified business model that offers exposure to the capital markets at a very attractive valuation, and income investors will love the 3.95% dividend yield that the stock offers.
UBS Group impressed with net income of $ 2 billion in the second quarter, up 67% year over year, and saw strong growth in its wealth management business, which posted $ 25 billion in inflows for the quarter. The company is also seeing a gratifying surge in recurring fee income and should continue to benefit from the growing number of high net worth individuals seeking wealth management services in emerging markets. The bottom line is that given the company's trusted brand name and highly profitable business model, UBS Group is a fantastic addition to any portfolio.