The financial sector is full of big, well-known companies that offer money management, banking, insurance and accounting services. It is a part of any well-developed economy, since it is responsible for all financial transactions (loans, mortgages, insurance, transfers, etc.) between commercial and individual clients. Composing one of the largest portions of the S&P 500 index, finance stocks are a popular investment choice among traders.
These are 4 examples of stocks of large financial companies that might be worth looking into both for long-term and short-term traders.
Visa Inc. (V)
This transnational company has benefited from the tourism industry recovery and the growing volume of bank card transactions. The growing popularity of e-commerce and Visa’s willingness to cooperate with fintech companies has also played its role in Visa’s revenue growth in 2021. Though the stock’s price has lost -7% in the past month, it gained +6.13% within the year.
According to some analysts, Visa might be a promising finance stock choice and the temporary drop will only lead to further recovery, however it might not come instantly and the stock price may continue to drop lower. Currently, Visa is traded at $235 on the IQ Option platform.
JP Morgan Chase & Co (JPM)
Another company in the top by market capitalization is JP Morgan. The investment bank is one of America’s Big Four banks, which also include Wells Fargo, Citigroup and Bank of America. With over 200 years of history, the company’s revenue comes mainly from consumer and community banking, corporate and investment banking and asset and wealth management. So far in 2021, the company’s stock has outperformed its sector, despite competition from other major banks. The stock is up almost +60% within a year and it is currently traded at $158 .
Bank of America (BAC)
The third largest bank in the US based on market capitalization and market share is in a strong position among other financial companies. BAC is one of the top assets of Berkshire Hathaway, Warren Buffet’s investment company: as of March 2021, the investment fund held over 1 billion BAC shares. The stock gained +12% within a month and currently trades around the $41 mark.
Many analysts claim that despite temporary pullbacks, BAC may continue reaching new highs. Of course, such optimistic prognosis has to be taken with a grain of salt as the finance industry is highly regulated and any failure to comply might lead to significant losses. The bank’s large competitors should also be taken into account.
Covid-19 made it clear that e-commerce will only gain more popularity and more users will use online payments in the future. Despite being less favored in emerging economies, where people are more conservative and have less trust for online transactions, PayPal manages to continuously grow the amount of its active users, which translates into the company’s stock price.
Though this year’s third quarter results were not too promising for the company, analysts say that the loss of such a big client as eBay may be compensated with Venmo’s success. Moreover, PayPal confidently implements cryptocurrency transactions, establishing itself in the crypto world. PYPL grew +41% within a year and currently it is traded at $278 on the IQ Option platform.
As you can see, the financial sector has many big players to choose from. Which of these finance stocks do you consider to be promising?