Sometimes the greatest potential lies in seemingly modest companies, and investors looking for hidden (but vital) gems may want to seek out so-called "tollbooth" stocks—firms that operate a critical, if niche, portion of an industry that enjoy a near-monopoly on their services or products. These may not be the flashiest names, but they succeed because most anyone else in their industry or sector relies on them in order to do business.
Three unique tollbooth stocks—Woodward Inc. (NASDAQ: WWD), Jack Henry & Associates Inc. (NASDAQ: JKHY), and Roper Technologies Inc. (NASDAQ: ROP)—may stand out for investors looking to employ this unique strategy when building a portfolio. None of these companies is massive (the largest has market capitalization of about $36 billion), but they all have important niches that help to ensure their continued success within broader industries.
