Send me real-time posts from this site at my email
Zacks

Here's Why You Should Add Nasdaq (NDAQ) to Your Portfolio

Nasdaq NDAQ is well-poised for growth based on organic initiatives, strategic buyouts, and solid capital position.

Shares of Nasdaq have gained 4.6% year to date against the industry's decline of 0.7%. The Zacks S&P 500 composite has risen 11.1% in the said time frame. The Zacks Consensus Estimate for 2020 and 2021 earnings indicates 11.2% and 4% growth, respectively, from the year-ago reported figure. The expected long-term earnings growth rate is 8.8%, higher than the industry’s average of 6.8%.

The company’s return on equity of 16.1%, which has improved over the past seven years, remains higher than 12.2% for the industry, reflecting the company’s tactical efficiency in using shareholder’s funds.


Nasdaq’s impressive growth is driven by organic growth and strategic acquisitions. While the company has increased focus on Market Technology and Information Services businesses, offering the biggest growth opportunities, its organic growth has aided by its strategy of accelerating its non-trading revenue base. Management expects 5-7% medium-term growth from non-trading revenue base.

The company remains focused on maximizing opportunities as a technology and analytics provider. To that end, Nasdaq acquired ESG workflow provider, OneReport, and investment analytics firm, Solovis, during the first quarter.

Its diverse business model helps Nasdaq enjoy a healthy balance sheet and cash position along with modest operating cash flow.

Given sustained strong performance, the company engages in effective capital deployment.  With the 4% hike in April 2020, the company’s dividend payout saw a five-year CAGR (2014-2019) of 29.31%. Its dividend yield of 1.8% betters the industry average of 1.5%, making the stock an attractive pick for yield-seeking investors.

This Zacks Rank #2 (Buy) leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information and public and private company services has a solid history of delivering positive surprise in each of the last five quarters with the average beat being 3.35%.

Other Stocks to Consider

Investors interested in the same industry can look at CME Group CME, Cboe Global Markets CBOE and Intercontinental Exchange ICE, each carrying Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CME operates contract markets for the trading of futures and options on futures contracts worldwide. The company delivered 4.48% positive surprise in the last reported quarter.

Cboe Global operates as an options exchange in the United States. The company delivered 7.14% positive surprise in the last reported quarter.

Intercontinental Exchange operates regulated exchanges, clearing houses, and listings venues for commodity, financial, fixed income, and equity markets in the United States, the United Kingdom, European Union, Singapore, Israel, and Canada. The company delivered 4.07% positive surprise in the last reported quarter.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>

 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Cboe Global Markets, Inc. (CBOE): Free Stock Analysis Report
 
Intercontinental Exchange Inc. (ICE): Free Stock Analysis Report
 
CME Group Inc. (CME): Free Stock Analysis Report
 
Nasdaq, Inc. (NDAQ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue