The financial sector is comprised of companies that offer services broadly aimed at providing loans, insurance, and money management services for individuals and firms. The list of financial sector service companies includes retail and commercial banking, accounting, insurance, asset management, credit cards, and brokerages. Well-known companies in the sector include JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), and Citigroup Inc. (C). Financial stocks, as represented by the Financial Select Sector SPDR ETF (XLF), have underperformed the broader market with a total return of -10.8% compared to the S&P 500's total return of 7.1% over the past 12 months. These market performance numbers and the statistics in the tables below are as of June 22.
Here are the top 3 financial stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Financial Stocks
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|
|Unum Group (UNM)||16.48||3.4||3.5|
|MetLife Inc. (MET)||37.32||33.9||4.0|
|Synchrony Financial (SYF)||23.77||13.9||5.4|
- Unum Group: Unum provides disability insurance, group life insurance, and payroll-deducted voluntary benefits for employees primarily at U.S. corporations. The company reported a 42.7% decline in net income in Q1 2020, which ended March 31, 2020. Unum said that the spread of COVID-19 has unfavorably impacted the company's business and that it is unable to estimate what the ultimate impact of the pandemic will be on the company at this time.
- MetLife Inc.: MetLife offers life insurance, auto and homeowners insurance, employee benefits, retail banking, and other financial services. The company reported net income growth of 224% on revenue growth of 12% in Q1 2020, which ended March 31, 2020.
- Synchrony Financial: Synchrony Financial is a consumer financial services company offering a range of credit services, including private-label credit cards, small-and-medium-sized business credit products, and installment loans. The company also offers various deposit products insured by the Federal Deposit Insurance Corporation (FDIC).
Fastest Growing Financial Stocks
These are the financial stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Ameriprise Financial Inc. (AMP)||148.35||18.2||463.1|
|MetLife Inc. (MET)||37.32||33.9||239.3|
|American International Group Inc. (AIG)||31.81||27.4||164.0|
- Ameriprise Financial Inc.: Ameriprise Financial is a financial planning and services firm. The company offers products and services for clients, including cash and liquidity, asset accumulation, income, protection, and estate and wealth transfer.
- MetLife Inc.: See above for company description.
- American International Group Inc.: American International is a global insurance company that provides property-casualty insurance, life insurance, and retirement services to commercial, institutional, and individual customers. The company reported net income growth of 166.4% for Q1 2020, which ended March 31, 2020. The company said that the growth was mostly driven by $3.5 billion of pre-tax net realized capital gains compared to $446 million of pre-tax net realized capital losses in the same quarter a year ago.
Financial Stocks with the Most Momentum
These are the financial stocks that had the highest total return over the last 12 months.
|Financial Stocks with the Most Momentum|
|Market Cap ($B)||12-Month Trailing Total Return (%)|
|MarketAxess Holdings Inc. (MKTX)||520.28||19.7||57.7|
|MSCI Inc. (MSCI)||333.46||27.9||42.3|
|S&P Global Inc. (SPGI)||323.73||78.0||41.7|
|Financial Select Sector SPDR ETF (XLF)||N/A||N/A||-10.8|
- MarketAxess Holdings Inc.: MarketAxess operates a platform for corporate and emerging market bond trading. Serving broker-dealer clients, the company offers price discovery, trade execution, and related services. MarketAxess reported record revenue and operating income, which rose 36% and 44%, respectively, in Q1 2020 ended March 31, 2020.
- MSCI Inc.: MSCI is a finance company that offers services to customers including asset managers, banks and wealth managers to help them make key financial decisions, including trading securities and managing their portfolios. MSCI publishes a long list of prominent indexes that track a broad range of securities.
- S&P Global Inc.: S&P Global provides financial information services. The company offers ratings, benchmarks, analytics, and data in the global capital and commodity markets. S&P Global announced in early April the appointment of Dan Draper to the role of Chief Executive Officer (CEO) of S&P Dow Jones Indices.
YCharts. "Financial Data," Accessed Jun. 22, 2020.
Unum Group. "Unum Group Reports First Quarter 2020 Results," Accessed Jun. 22, 2020.
MetLife Inc. "METLIFE ANNOUNCES FIRST QUARTER 2020 RESULTS," Page 2. Accessed Jun. 22, 2020.
American Insurance Group Inc. "AIG Reports First Quarter 2020 Results," Accessed Jun. 22, 2020.
MarketAxess Holdings Inc. "MARKETAXESS REPORTS FIRST QUARTER 2020 RECORD REVENUES OF $169.0 MILLION, RECORD OPERATING INCOME OF $91.1 MILLION AND RECORD DILUTED EPS OF $1.96," Accessed Jun. 22, 2020.
S&P Global Inc. "Dan Draper Appointed CEO of S&P Dow Jones Indices," Accessed Jun. 22, 2020.