In my continued quest to diversify my holdings, I am always on the lookout for individual undervalued dividend growth stocks that would further diversify portfolio. The last several stock analyses have featured companies in industries that are already represented in my portfolio. This analysis is unique because I am going to analyze Nasdaq, Inc. (NYSE:NDAQ). I’ve purchased many stocks that are listed on Nasdaq, but have never considered purchasing the company that owns the exchange. While the numbers are looking solid, Nasdaq does not appear to be trading at a significant discount compared to the broader market. But let’s take a deeper dive into the company before arriving at a final conclusion!
We hear the word “Nasdaq” all the time, especially those that follow the stock markets closely. But what is Nasdaq, Inc.? Nasdaq, Inc. owns and operates the Nasdaq stock exchange, along with 8 other European stock exchanges. Nasdaq makes money by four major segments: Market Segments (i.e. fees for transactions), listing services (i.e. fees for listing a company on the exchange, IPOs, etc.), Information Services, and Technology Solutions. For more detail about each segment, please refer to this great article on Investopedia.com. My takeaway from my research and the Investopedia article is that the company is more than just a marketplace that lists stocks.
NDAQ recently released their third quarter results at the end of October. The numbers were pretty strong compared to the prior period. The company’s organic sales were up 5% and EPS increased 14% compared to the prior year. Strong metrics for sure. In the earnings release, it was noted that total revenues actually decreased compared to the prior year. But that was due to the “divestiture of the Public Relations Solutions and Digital Media Services businesses and a $7 million unfavorable impact from changes