3 Capital Markets Stocks to Buy Now Adding shares of the companies that make the market tick could end up being a fantastic decision, especially given the market's continued strength. Let's take a look at 3 capital markets stocks to buy now.
By Sean Sechler
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This story originally appeared on MarketBeat
Companies that are involved in capital markets play a critical role in finance and economics. Just think about all of the money that flows into and out of the equity and bond markets every single day to grasp the importance of this industry. Capital markets are where savings and investments are moved between suppliers of capital and those in need of capital. Without them, companies would have trouble raising financial capital and growing their businesses. These markets consist of a primary market where new securities are issued and sold, and a secondary market where investors can trade existing securities.
As traders and investors, it's easy for us to recognize just how important capital markets are. Adding shares of the companies that make the market tick could end up being a fantastic decision, especially given the market's continued strength. Let's take a look at 3 capital markets stocks to buy now.
S&P Global Inc. (NYSE:SPGI)
If you are interested in one of the premier providers of independent credit ratings, indices, and data to the capital markets, look no further than S&P Global. The company's credit ratings and research provide vital information on a debt issuer's ability to meet financial obligations, which is something that the biggest investors and decision-makers rely on to make massive financial decisions. The company also provides multi-asset class data, research, and analytics with its market intelligence segment and owns the S&P Dow Jones Indices brand.
S&P Global has a strong brand name as one of the "big three" credit rating agencies and a competitive advantage in the capital markets space, particularly since it is one of ten nationally recognized statistical rating organizations as designated by the SEC. The company reported Q4 EPS that was up 4% year-over-year and also increased its dividend by 15%, both additional reasons to consider adding shares at this time.
BlackRock, Inc. (NYSE:BLK)
Next, we have BlackRock, which is one of the leading investment management companies in the world and the largest asset manager in the United States. This is a great stock to own for a few different reasons. With over $8.68 trillion in total assets under management at the end of 2020, the company's reputation is unparalleled in the finance industry. You are probably familiar with BlackRock's iShares ETFs that have the leading market share both domestically and on a global basis, and the company is well-known for its expertise in fixed income asset management.
BlackRock serves institutional investors and individual investors all over the world and is poised to continue capturing market share over the years given its strong fund performance and diverse product mix. The company reported $391 billion of full-year total net inflows in 2020, which reflects 5% organic asset growth. BlackRock also saw its 2020 revenue grow by 11% year-over-year and returned $3.8 billion to shareholders in 2020, including $1.5 billion of share repurchases. The bottom line here is that BlackRock is one of the premier capital markets stocks to have in your portfolio and is a stock that has been trending nicely over the past month.
MSCI Inc (NYSE:MSCI)
Institutional investors all over the world go to this company for research, benchmark indexes, analytics, and more, which tells you that it's a key player in capital markets. MSCI, or Morgan Stanley Capital International, is a stock worth checking out for that reason alone, but the fact that it has a wide economic moat and has benefitted from market appreciation and huge net inflows recently are additional selling points. MSCI estimates that $12 trillion in assets globally are benchmarked to its indexes, and the company's analytics segment offers risk management, performance attribution, portfolio management, and other regulatory reporting solutions to some of the biggest investors in the world.
The rise of passive investing, which is an investment strategy that involves less buying and selling in exchange for holding a diversified set of assets, has benefitted MSCI greatly over the last few years. Don't expect this trend to change anytime soon, and the fact that most passive index funds are tied to indexes created and licensed by MSCI is a huge vote of confidence for this company. MSCI reported a Q4 net income of $156.2 million, up 27.2% year-over-year, and saw its Q4 Adjusted EBITDA increase by 16.3% to $256.1 million. As long as investors continue to favor ETFs and other low-cost index-based investment products, MSCI is a company that will thrive.