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, as represented by the Financial Select Sector SPDR ETF (XLF), have outperformed the broader market, with a total return of 52.5% compared to the Russell 1000's total return of 38.1% over the past 12 months. These performance numbers and all statistics in the tables below are as of July 16, 2021.
Here are the top 3 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|
|Rocket Companies Inc. (RKT)||17.35||34.5||3.9|
|Athene Holding Ltd. (ATH)||62.44||12.0||4.0|
|Old Republic International Corp. (ORI)||24.26||7.4||4.3|
- Rocket Companies Inc.: Rocket Companies helps consumers to obtain mortgages, personal and car loans, as well as other financial services. Its flagship business is Rocket Mortgage, an online mortgage application tool.
- Athene Holding Ltd.: Athene Holding is an insurance holding company that provides issuance, reinsurance, and other services globally related to retirement savings products. The company announced on July 15 that it would acquire Foundation Home Loans, a UK-based mortgage lender with a 3 billion pound ($4.1 billion) portfolio of owner-occupied and buy-to-let mortgages on its balance sheet. Terms of the deal were not disclosed.
- Old Republic International Corp.: Old Republic International is an insurance holding company. Through subsidiaries, it markets, underwrites, and provides risk management services for property and liability, title, life, health, and other insurances.
These are the top financial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Financial Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Everest Re Group Ltd. (RE)||246.78||9.9||1,980||38.4*|
|Jefferies Financial Group (JEF)||33.37||8.2||712.5||57.3|
|Fifth Third Bancorp (FITB)||36.40||25.6||2,220||0.5|
Source: except for Everest Re Group revenue*, all data above is from YCharts
- Everest Re Group Ltd.: Everest Re Group is a reinsurance provider. The company offers reinsurance to property and casualty insurers and policyholders in the U.S. and internationally. The company's net income soared as total revenue jumped 38.4% on strong growth of written premiums in Q1 FY 2021, ending March 31.
- Jefferies Financial Group: Jefferies Financial Group is a diversified financial services company operating globally. The company provides investment banking, capital markets, direct investing, and asset management services. On July 14, Jefferies announced a strategic alliance with in the areas of corporate and investment banking Sumitomo Mitsui Financial Group, Inc. (SMFG), Sumitomo Mitsui Banking Corp., and SMBC Nikko Securities Inc. The partnership will focus on expanding existing offerings in areas including: the companies' U.S. leveraged finance business; developing cross-border M&A opportunities involving Japanese companies; and pursuing financing and investment banking opportunities in the U.S. healthcare sector.
- Fifth Third Bancorp: Fifth Third Bancorp is a bank and financial holding company serving commercial and individual customers primarily in the Midwest and Southeastern U.S. The company offers deposit accounts, loans, and a wealth and asset management service.
These are the financial stocks that had the highest total return over the last 12 months.
|Financial Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|SLM Corp. (SLM)||19.95||6.3||187.4|
|OneMain Holdings Inc. (OMF)||59.34||8.0||185.0|
|Western Alliance Bancorp (WAL)||94.36||9.8||162.3|
|Financial Select Sector SPDR ETF (XLF)||N/A||N/A||52.5|
- SLM Corp.: SLM Corp. is an education funding and private student loan services company better known as Sallie Mae. Through subsidiaries, SLM provides debt management, business and technical products, and other services to colleges, universities, and loan guarantors.
- OneMain Holdings Inc.: OneMain Holdings is a holding company that, through subsidiaries, offers personal and auto loan products. The company conducts business throughout the U.S.
- Western Alliance Bancorp: Western Alliance Bancorp is a multi-bank holding company. The company's subsidiaries provide banking and financial services to customers across Nevada, California, and Arizona. For Q2 2021, net income increased by nearly 140% YOY on net revenue gains of 58.4% YOY. The performance was driven by loans and deposit growth.
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YCharts. "Financial Data." Accessed July 19, 2021.
Athene Holding Ltd. "Athene to Acquire Foundation Home Loans." Accessed July 19, 2021.
Everest Re Group. "Everest Re Group Reports First Quarter 2021 Results," Page 1, 7. Accessed July 19, 2021.
Jefferies Financial Group. "Jefferies and SMBC Group Announce Strategic Alliance to Drive Growth." Accessed July 19, 2021.
Western Alliance Bancorp. "Western Alliance Bancorporation Reports Second Quarter 2021 Financial Results," Page 1. Accessed July 19, 2021.