The financial sector is comprised of companies that offer services including loans, savings, insurance, payment services, and money management for individuals and firms. Financial sector stocks include a wide range of companies involved in retail and commercial banking, accounting, insurance, asset management, credit cards, and brokerage. Well-known companies in the sector include Wells Fargo Co. (WFC), Goldman Sachs Group Inc. (GS), and Morgan Stanley (MS).
Financial stocks, represented by the Financial Select Sector SPDR ETF (XLF), have outperformed the broader market, with a total return of 36.7% compared to the Russell 1000’s total return of 27.2% over the past 12 months. These performance numbers and all statistics in the tables below are as of Dec. 23, 2021.
Here are the top three financial stocks with the best value, the fastest growth, and the most momentum.
These are the financial stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
| Best Value Financial Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| UWM Holdings Corp. (UWMC) | 6.38 | 0.6 | 0.4 |
| Santander Consumer USA Holdings Inc. (SC) | 42.24 | 12.9 | 4.2 |
| Alliance Data Systems Corp. (ADS) | 69.07 | 3.4 | 4.3 |
Source: YCharts
- UWM Holdings Corp. UWM Holdings is a holding company that, through its subsidiaries, engages in the origination, sale, and servicing of residential mortgage loans.
- Santander Consumer USA Holdings Inc.: Santander Consumer USA Holdings is a holding company that, through its subsidiaries, offers financing for new and used cars, auto refinancing, and other services. For Q3 2021, ended Sept. 30, the company reported a 55.7% year-over-year increase in net income even though auto originations fell 7% to $7.8 billion. The company did not provide additional information in its press release about the key drivers of its net income gain.
- Alliance Data Systems Corp.: Alliance Data Systems provides marketing, loyalty, and payment solutions to consumer-based industries. The company’s clients include financial services providers, grocers, petroleum and specialty retailers, among others. On Nov. 8, the company completed the spin-off of its LoyaltyOne segment into a new publicly traded company called Loyalty Ventures Inc. (LYLT). Alliance Data will retain 19% of the outstanding shares of Loyalty Ventures common stock.
These are the top financial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
| Fastest-Growing Financial Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Franklin Resources Inc. (BEN) | 33.42 | 16.8 | 766.7 | 27.9 |
| Athene Holding Ltd. (ATH) | 85.21 | 16.4 | 11.1 | 173.5 |
| Evercore Inc. (EVR) | 135.71 | 5.3 | 270.3 | 105.4 |
Source: YCharts
- Franklin Resources Inc.: Franklin Resources offers investment advisory services to mutual fund, retirement, and institutional investors. The company manages a broad range of asset classes, including global equity, municipal fixed income, hedge funds, and alternative investments. On Dec. 14, the company announced a quarterly cash dividend of $0.29 per common share. The dividend is payable on Jan. 14, 2022 to shareholders of record as of Dec. 31, 2021.
- Athene Holding Ltd.: Athene Holding is an insurance holding company that issues, reinsures, and acquires retirement savings products through subsidiaries. The company serves customers around the world.
- Evercore Inc.: Evercore is an investment banking and investment management company. The company provides advisory services related to mergers, acquisitions, divestitures, and similar operations. It also offers wealth management services. During Q3 2021, Evercore reported that net income attributable to the company nearly quadrupled as net revenues more than doubled YOY. The company provided advisory services on three of the top 10 largest announced U.S. M&A transactions of 2021.
These are the financial stocks that had the highest total return over the past 12 months.
| Financial Stocks With the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Upstart Holdings Inc. (UPST) | 148.14 | 12.1 | 219.8 |
| Signature Bank (SBNY) | 319.73 | 19.4 | 139.2 |
| Blackstone Inc. (BX) | 135.00 | 96.0 | 115.3 |
| Russell 1000 | N/A | N/A | 27.2 |
| Financial Select Sector SPDR ETF (XLF) | N/A | N/A | 36.7 |
Source: YCharts
- Upstart Holdings Inc.: Upstart Holdings is a holding company whose subsidiaries offer a cloud-based artificial intelligence lending platform to make credit more available. The platform also helps bank partners to reduce the risk of lending.
- Signature Bank: Signature Bank is a full-service commercial bank. The company provides investment, brokerage, asset management, and insurance products as well as various commercial lending services and other specialty-finance lending solutions.
- Blackstone Inc.: Blackstone is a global investment firm offering a range of investment vehicles focused on private equity, real estate, public debt and equity, growth equity, non-investment grade credit, real assets, and other types of assets. It serves both institutional investors and individuals. On Dec. 20, the company announced that funds managed by Blackstone had agreed to make a majority investment in Supergoop!, the first protective skincare brand that centers SPF. Supergoop! has created a new and rapidly-growing category in SPF-focused skincare.
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