The capital markets have been seeing increasing transaction activity lately thanks to the low-interest-rate environment and bullish equity markets. As a result, established capital market firms Goldman Sachs (GS) and Charles Schwab (SCHW) should benefit in the near-term. But which of these two stocks is a better buy now? Read more to find out.The Goldman Sachs Group , Inc. (NYSE:GS) is an established financial institution that provides a range of financial services to corporations, financial institutions, governments, and individuals worldwide. It operates through four segments—Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. The Charles Schwab Corporation (NYSE:SCHW) provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates in two segments—Investor Services and Advisor Services.
With major stock market indexes hovering near all-time highs over the past few months, and the Fed holding benchmark interest rates unchanged for now, capital market activities, such as IPOs, are rising. According to Globe Newswire, the global financial services market is expected to grow at a 9.9% CAGR to hit $22.5 trillion this year. Consequently, both GS and SCHW should benefit.
GS’ stock price has advanced 12.4% over the past three months, while SCHW has returned 4.4%. Also, GS’ 28.2% gain over the past six months is significantly higher than SCHW’s 19.6% returns. Furthermore, in terms of year-to-date performance, GS is the clear winner with 41% gains versus SCHW’s 33% returns.