3 U.S. Securities and Exchanges Stocks to Buy on Solid Industry Trends

The Securities and Exchanges industry comprises companies that operate electronic marketplaces, which facilitate the buying and selling of stocks, stock options, and bonds or commodity contracts. They facilitate trading across a diverse range of products in multiple asset classes and geographies. Industry players generate revenues from fees received from the listed companies on their exchanges.

Within the Financials sector, the Zacks-defined Securities and Exchanges industry is currently within the top 4% of the Zacks Industry Rank. Since the computer storage devices industry is ranked in the top half of the Zacks Ranked Industries, we expect it to outperform the market over the next three to six months.

At this stage, we recommend three U.S. securities and exchanges stocks with a favorable Zacks Rank to strengthen your portfolio. These are CME Group Inc. CME, Cboe Global Markets Inc. CBOE and Intercontinental Exchange Inc. ICE.  

U.S. Securities and Exchanges Industry Thriving

Industry players are largely dependent on product and service portfolios for revenues. Major services include trade execution, clearing, settlement services for securities and commodity contracts, listing services plus trading, and clearing systems services. Sustainable trading volume growth, driven by trading volatility, fuels transaction and clearing fees (a major component of the top line of industry players).

Other revenue sources include data products and financial indexes, along with information and public company services. Increasing focus on accelerating the non-trading revenue base, which includes market technology, listing and information revenues, infuses dynamism in the business profiles of the industry participants.

Per technavio, the securities exchanges market in 2028 is expected to see a five-year CAGR of 12.1% to $49.6 billion, given increasing demand for various investment opportunities. Also, the increased adoption of cryptocurrencies like Bitcoin and Ethereum, among others, is a boon.

The chart below shows the price performance of our three picks in the past three months.

CME Group Inc.

CME Group’s strong market position, driven by varied derivative product lines, bodes well. CME’s efforts to expand and cross-sell through strategic alliances, acquisitions, new product initiatives and a stable global presence are encouraging.

While higher electronic trading volume adds CME’s scalability, product innovation and a growing proportion of volume from customers outside the United States have been driving results. Solid liquidity supports wealth distribution to its shareholders.

CME offers Bitcoin and Ether options based on the exchange's cash-settled standard and micro-Bitcoin and Ethereum futures contracts. Its options give the buyer of the call/put the right to buy/sell cryptocurrency futures contracts at a specific price at some future date. CME currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CME Group has an expected revenue and earnings growth rate of 6.7% and 7.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last 30 days.

Cboe Global Markets Inc.

Zacks Rank #2 Cboe Global Markets trading volume growth should drive transaction fee and, in turn, fuel organic growth. For 2025, CBOE projects total organic net revenue growth in the mid-single-digit range and Data Vantage organic net revenue growth in the mid to high single-digit range.

CBOE remains on track to grow its recurring non-transaction revenues. Strategic acquisitions are improving CBOE’s competitive edge by diversifying the portfolio, adding capabilities, generating expense synergies, and expanding into new geographies. Strong liquidity has been aiding capital deployment.

Cboe Global Markets has an expected revenue and earnings growth rate of 6.8% and 7.3%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days.

Intercontinental Exchange Inc.

Zacks Rank #2 Intercontinental Exchange benefits from its compelling product and service portfolio, the broad range of risk management services and strength in global data services. Continued strength in ICE’s energy franchise and improving recurring market data revenues are likely to keep growth on track.

Strategic buyouts help Intercontinental Exchange achieve cost synergies that are in sync with its aim of generating long-term value for shareholders. ICE is well-poised for growth due to accelerated digitization in the U.S. residential mortgage industry. ICE is also engaged in the effective deployment of capital.

Intercontinental Exchange has an expected revenue and earnings growth rate of 6.3% and 12.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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