TMX Group (X.TO)

It has done well, is well run, and is a good investment for the long term. A broad play on the stock market.

A monopoly on the markets, no one has successfully challenged its hold. Clips a coupon when shares get traded, so it benefits from volatility. Huge amount of data that they sell. Range-bound, but you should see better results.

It's had nice up move this year so far. Hold, if you own, or take some profits if you've held this for a while. Pruning your portfolio is smart.

Very good numbers and a strong business.
Expecting further growth going forward.
Solid management team. 

Had a really big breakout from multi-year base. This is typically really positive, as it's telling us that something is changing for the positive. Still likes it. Really positive chart.

One of many publicly traded exchanges globally.
Unsure how much company will be able to grow.
20x earnings a good share price to invest at.

Global owner and operator of stock exchanges. Increasingly into adjacent areas like data analytics. Pretty consistent grower, compounded 8% pace of earnings and dividend growth over the last decade. 19x earnings, a discount to peers. Discount should narrow as they expand. Yield is 2.41%.

Sideways trading range for 2 years. "The longer the base, the more time in space." Breaking out to new highs, looking really positive. Yield is 2.44%.

One of the most defensive plays on the TSX is the TSX itself. Trading under X on its own exchange, the TMX Group just reported another beat, its third in the past year, with revenues jumping 80% over full-year 2021 and net income leaping 60% also over FY 2021. Robust Canadian stock performance (outperforming the Wall Street majors in 2022) and ongoing volatility are good for TMX’s business. Selling data provides another recurring revenue stream. TMX currently pays 2.58% but that dividend has been climbing since 2016. Also, its beta is a measly 0.56 and it trades at 14.16x. Safe. Read: Risk tolerance and safety for our full analysis. 

This is a very defensive and high quality investment. Half of the business is selling data so it has recurring revenues. It also has listing fees and with a rebound in the stock market these could increase. Good value compared to competitors and earnings growth should be in the double digits for the next few years. Also a great dividend payer and has raised dividends every year since 2016.   Buy 2  Hold 5  Sell 0

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Market volatility helped trading volume. Integration of recent acquisitions continue. Balance sheet improved. Actvely pursuing M&A opportunities. Unlock Premium - Try 5i Free

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research Business model provides market ‘hedge’. Gaining market share via acquisitions. Increased dividend by 8%. Attractive valuation compared to history. Unlock Premium - Try 5i Free