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Tag: Financial Stocks

  • The Three Best Financial Stocks for Investment

    The Three Best Financial Stocks for Investment

    The financial stocks are expected to perform better in 2021.

    Since the evolution of the internet, the financial sector has grown and has become a much bigger and enhanced marketplace for payments and other financial services. Banks that are the bigger part of this industry haven’t had a good time in 2020, whereas, online banking services and payment firms have made gains.

    Analysts see financial stocks making a sharp rebound in 2021 and beyond with things getting better—in the longer run. But an investment in the market’s best financial stocks could pay off handsomely this year. So, let’s have a look at the three best financial stocks for investment in 2021.

    Goldman Sachs (GS)

    Goldman Sachs (GS) is one of the market leaders and is a strong financial firm that has some impeccable operations. The company has performed quite well compared to the rest of the industry firms.

    During the full-year 2020, the company remained focused on serving clients and executing strategic priorities and generated net revenues of $44.56 billion, up by 22% year-over-year. This marked the highest annual net revenues in 11 years, which is quite an achievement. While the diluted EPS was $24.74, the second-highest EPS reported by the company in its history.

    Goldman Sachs (GS) is well on track and this year things are expected to grow with continuous momentum. So, GS stock is for sure one of the best investment options in the financial sector.

    Nelnet (NNI)

    Nelnet (NNI) is a US-firm that deals in the administration and repayment of student loans and education financial services. Nelnet has been one of the top performers in the financial sector during the past year.

    As of the third quarter, the Company recorded GAAP net income of $71.5 million, which was higher than the prior year’s net income of $33.2 million. The increase in net income was primarily driven by the rise in loan spread and the recognition of a negative provision for loan losses during Q3 on Nelnet’s loan portfolio. Moreover, the company gained recognition from the sale of consumer loans.

    The company is continuing to perform well and has been making some strategic collaborations. The best part is that they have received customer-focused responses from their operating businesses during the pandemic, which has really boosted things up. In the long-term, the launch of Nelnet Bank and third-party investment received by ALLO will play a massive role in the firm’s growth. So, NNI is another prominent stock for investment.

    Credit Acceptance (CACC)

    Credit Acceptance (CACC) is an auto finance company that provides automobile loans and other related financial products. CACC operates its financial program via a network of national dealer-partners and the automobile dealers’ part of its programs.

    In the last quarter report, the company reported a net income of $166.3 million during Q4 2020, compared to $161.9 million in 2019. Whereas, for the full-year, the company recorded a net income of $421 million, on a lower side from last year which was $656.1 million.

    Recently, the company completed a $500 million asset-backed non-recourse secured financing. The company will use this financing to repay outstanding indebtedness. Earlier this year, Credit Acceptance completed similar financing worth $100 million.

    Credit Acceptance (CACC) shares have been on the downward side since mid-2020. However, with improvement in the Q4 results, thereis much upside expected as we head forward.

  • The Three Top Financial Stocks for Investment

    The Three Top Financial Stocks for Investment

    There are some exciting top-end financial stocks in the market.

    Tough times in 2020 have affected the working of various financial organizations. Though the financial sector is comprised of companies that offer different services including payment, loans, insurance, savings, and money management.

    The financial stocks belong to a vast scale of firms that involve commercial banking, credit cards, e-banking, brokerage, insurance, and asset management.

    With things turning around, the financial industry is also getting a stronghold this year. Moreover, there are a lot of expectations from the Biden administration to make a quick economic recovery. Based on this optimistic approach the market is performing far better. So, let’s have a look at the three top financial stocks for investment this year.

    JPMorgan (JPM)

    JPMorgan (JPM) is the largest US bank, and the largest company in the financial sector, with over market value of 426.21 billion. JPMorgan was one of those few companies that survived the financial crisis—managed by a legend, the CEO of the company Jamie Dimon. The company is again doing pretty well in yet another macroeconomic crisis.

    To add to the point, JPMorgan is too big to fail—as it continues to pass mandated stress tests regularly. Recently, Moody’s completed the periodic review of ratings of JPMorgan. Based upon the ratings, the a2 BCA reflects the diversification and competitive position of the company’s four franchises, including Commercial Banking, Corporate and Investment Banking, Consumer and Community Banking, and Asset and Wealth Management.

    The company was rated to skillfully improve its offerings and profitability during the pandemic. JPMorgan’s business segment has a significant scale. The company produced around $53 billion of pre-provision profits in 2020, allowing the bank to absorb $17.5 billion in credit provisions during this period.

    LendingClub Corp. (LC)

    LendingClub Corp. (LC) is the first P2P lending firm to register its offering as securities with the SEC. The shares of the lending firm have been trading on a higher side since Dec. 2020. Late last year, the company announced the approval of its acquisition of Radius Bancorp by the Office of the Comptroller of the Currency.

    The company just announced that it has closed the acquisition of Radius Bancorp and its digital bank subsidiary, Radius Bank. The new addition to its ecosystem would strengthen the digital network and the complementary businesses of LendingClub. In the future, this would drive more revenue.

    In Q3 2020, the company reported a non-GAAP EPS of $0.25, surpassing the analyst estimates by $0.31. While the revenue was also above the estimates by $16.6 million, reported at $74.7 million.

    The company also improved its credit score recently. With an improvement to its Relative Strength (RS) Rating on Thursday, the score was upgraded from 88 to 92.

    American Express (AXP)

    One of the leading US multinational financial services corporations, American Express (AXP) is the least favorite for investors among JPM and LC. AXP stock after gaining more than 80% since March 2020 has little chance of upside.

    Forbes highlighted that AXP shares are currently trading close to their fair share price i.e., around $130. However, the growing share price has enthused investors. We know that the market has been unpredictable in the pandemic. So, it’s hard to forecast how the stock will behave in the coming time.

    The company reported low third-quarter outcomes, with net income at $1.1 billion compared to $1.8 billion last year. American Express (AXP) management highlighted that things are improving and the current circumstances are better than the past two quarters.

    If the company reports better Q4 results, the stock might pump—going against the expectations of Forbes.