Tomorrow is election day, although we might not know the results for weeks.
Many are worried about the prospect of another round of lockdowns with coronavirus cases surging.
And Americans are waiting to see if Congress can get its act together on another stimulus plan to help boost the economy. The longer we wait, the more damage is done.
But there are still many reasons to be hopeful!
Strong tech earnings, the prospect of progress in Washington, and good news on the scientific fight against coronavirus have led to big market surges this year — despite all the bad news investors have dealt with.
While this back and forth market may give investors heartburn, one key company is benefiting from the turbulence and booking bigger profits from the swings.
Today, I want to introduce you to this “perfect storm” stock that’s doing so well in today’s market.
And I’ll show you why the company should continue to help build your retirement wealth in 2021 and beyond!
Making Bank From Crazy Market Action
The “perfect storm” stock I want to share with you today is Nasdaq Inc. (NDAQ).
When you hear the name, you probably think of the Nasdaq Composite Index which tracks a tech-heavy basket of stocks and is constantly monitored in the financial news.
Nasdaq Inc. is the parent company that manages the Nasdaq Index. But there’s so much more to NDAQ.
The firm identifies as a technology company that serves many different parts of our financial system. I’m particularly excited about NDAQ because of the business growth that’s been driven as a result of the coronavirus crisis.
You see, in addition to licensing information about its Nasdaq Composite Index, NDAQ also manages some of the most popular trading exchanges.
These exchanges charge fees for every transaction that takes place in the markets. So as the market becomes more volatile and trading activity picks up, NDAQ is generating more revenue.
And the company also generates income by selling live price information for stocks and other products traded on its exchange. So as more customers open accounts via Robinhood and other discount brokers, NDAQ is making money just from investors checking prices on their positions.
Nasdaq also has other products that help financial institutions better manage risk and uncover things like money laundering. It also charges fees when companies raise capital by listing new shares or bonds on its trading exchanges.
In short, NDAQ has a tremendously lucrative suite of financial technology products. And the more volatility picks up in the market, the more revenue these products can generate!
Using NDAQ to Grow Your Retirement Wealth
Shares of NDAQ could be a great fit for your retirement account — and not just because the company is doing so well right now.
Looking more closely at the stock, you can get a lot of value and retirement income from the shares.
Nasdaq Inc. currently pays investors a quarterly dividend of $0.49, which adds up to a 1.62% annualized yield. That’s well above what you can get from any legitimate savings account that I’m aware of.
The company also has a history of steadily increasing its dividend. And as profits grow, NDAQ will have plenty of extra profits to pay out to shareholders.
Another reason to like NDAQ is the value that you’re getting when you buy shares.
Next year, the company is expected to earn profits of $6.09 per share. Since the stock is trading near $121, you’re able to invest for less than 20 times earnings. That means you’re paying just under $20 for every dollar that the company earns.
That’s cheaper than the 24 times earnings for the average stock in the S&P 500. And in today’s market, we’re seeing more money flow towards stocks trading at a discount to the overall market.
This simply means investors are more likely to favor stocks like NDAQ as they take profits and move cash out of some of the more popular stocks like Amazon and Alphabet.
In short, NDAQ gives you a great chance to invest in a technology company that’s benefiting from the market fluctuations.
It’s a stock that pays you a decent (and growing) dividend.
And it’s a value investment that should benefit from a shift away from high-priced blue-chip tech stocks and into more reasonably priced value companies.