Are you missing out on the sizeable gains that successful financial services stocks are making?
The goal of these companies is to make their clients richer and more financially secure. But as their shareholders, you also can earn a piece of their profits and build your own wealth as well.
Investors can match up their long-term goals with these companies over longer time frames. If you already have some fast-growers and a couple of promising start-ups in your portfolio, then a few financial services stocks could round out the group.
Computershare Limited (ASX: CPU) is involved in stock exchange share registry and transfer agency services. When stocks get bought and sold, the company oversees the transaction and records the change in ownership of shares. The higher the volume of share trading, the more work Computershare does. As the ASX rises, Computershare benefits as well.
Macquarie Group Ltd (ASX: MQG), the investment bank, has turned in remarkable results recently with financial year 2014 earnings up over 50% on the back of investments in rising overseas markets. It has a strong international presence and can move investments to where greater gains can be achieved. It pays a healthy 3.8% yield partially franked. Analysts forecast double-digit earnings growth annually over the next several years. The US markets are still rising, which is a good tailwind for Australia's biggest investment bank.
Annuities and complementary retirement income specialist Challenger Ltd (ASX: CGF) operates a business with long-term horizons. Investment management is one side and the other is providing clients a way to have stable income in retirement along with superannuation. Challenger is also expanding its services for superannuation and SMSF funds. The company has a good track record for dividend growth – on average 15% annually in the past five years. Income investors should be interested in this stock.
