Bond markets are back in the spotlight as long term yields climb, geopolitical risks around the US and Iran stay elevated, and oil trades above $91 a barrel. That mix puts pressure on some stocks, but it can also create fresh openings where debt issuance and trading activity stay busy. This article walks through 3 stocks exposed to these forces and why their bond market links matter for your portfolio thinking.

The three stocks covered next are just a starting sample, since the full screen surfaced 43 more companies with equally detailed bond market narratives that are not included here. If you want to move straight from ideas to your own watchlist, use the Global Bond Market Intermediaries and Underwriters screener to identify, compare, and analyze the fixed income focused stocks that best fit your criteria.

Matsui Securities (TSE:8628)

Matsui Securities is a Tokyo based online broker that gives Japanese retail investors access to stocks, futures, options and other listed products, which ties it directly into the bond and securities dealing theme of this screener. The company generates all of its ¥54.3b revenue from online securities trading services, so activity levels on its platform are central to the story. With a market cap of about ¥282.4b, it sits in the mid sized bracket of Japan’s capital markets stocks.

For investors watching the pick up in bond issuance and trading, Matsui Securities offers a pure play on retail trading flows in fixed income and other listed products. Recent results point to firm earnings momentum and high returns on equity, yet the stock trades on a premium P/E and above some cash flow based fair value estimates, which raises questions about how much growth is already priced in. The company also pays a relatively high dividend that is not fully backed by free cash flow and relies on higher risk funding sources instead of customer deposits. That mix of strong recent performance, income potential and balance sheet sensitivity gives investors plenty to weigh up as bond markets stay busy.

Matsui Securities is priced for strength, yet its funding mix and premium P/E leave a few big questions unanswered. Get the full picture with the 2 key rewards and 1 important warning sign

Build your own high dividend and bond market shortlist

Matsui Securities and the other two stocks in this list all surfaced from a single Simply Wall St screen, but your edge comes from tailoring the filters to your own priorities. Use our flexible Screener to combine valuation, dividend, quality and risk filters into your own watchlist, or tap into our pre-built Investing Ideas for curated starting points.

XP (XP)

XP is one of Brazil's key capital markets platforms, handling securities distribution, brokerage and investment banking services that plug directly into the bond issuance and trading theme of this screener. The business is heavily geared to brokerage, which generated about R$18.2b in revenue, and most activity is tied to Brazilian clients, with a smaller contribution from other countries. With a market cap of about US$8.1b, XP is a sizeable listed intermediary in Latin America's largest fixed income and equity market.

XP provides exposure to Brazil's capital markets, where higher bond issuance and active trading can translate into more fees across brokerage, distribution and wealth management. The company combines reported profitability, a broad product shelf and technology driven distribution that aims to attract assets away from traditional banks. At the same time, it relies on external funding rather than deposits and operates in a competitive market where regulation and fee pressure remain important swing factors. For investors who want targeted exposure to Brazilian fixed income flows without owning a bank, XP is a stock worth closer inspection.

XP’s fee engine appears closely tied to bond activity, yet brokerage, funding and regulation can all move in different directions. See how the full picture lines up in the analysis report for XP

Daiwa Securities Group (TSE:8601)

Daiwa Securities Group is a full service securities company that links Japanese and global investors to capital markets, including underwriting and distributing corporate and government bonds alongside its equity trading, wealth management and asset management activities. Revenue is broadly diversified across Wealth Management at about ¥321.1b, Global Markets & Investment Banking at ¥284.1b, and Asset Management at ¥119.2b, with smaller contributions from other services. With a market cap of roughly ¥2.47t, Daiwa Securities Group is one of the larger listed capital markets stocks in Japan.

Daiwa Securities Group provides direct exposure to bond issuance, trading and fee income at a time when governments and large corporates are tapping debt markets heavily. In addition, its wealth and asset management arms add more recurring, asset based revenue. Recent results highlight profitability across divisions and record overseas income. However, earnings still rely on capital markets activity and the group funds itself through higher risk external sources rather than customer deposits, which could matter if liquidity tightens. Investors looking for a large, diversified broker dealer with both fixed income sensitivity and long term wealth management ambitions may find there is more to uncover here than headline valuation multiples suggest.

Daiwa Securities Group looks like a bond market workhorse, yet its external funding and earnings sensitivity to issuance could be masking a different risk reward trade off. Weigh that balance with the 3 key rewards and 1 important warning sign

Seeking Alternatives Before The Crowd Moves

Fresh stock ideas can move from under the radar to flying fast once momentum builds. Use these filters while it matters so you are not caught reacting late. Act now.

• Spot potential breakouts with solid cash generation and balance sheets by scanning the 26 high quality undervalued stocks before those valuations are fully caught by the wider market.
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• Identify income candidates while yields stay elevated by reviewing the 34 dividend fortresses that focus on payments supported by stronger fundamentals, not just headline yield.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.