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 underperformed the broader market, providing investors with a total return of 4.0% compared to the Russell 1000's total return of 20.8% over the past 12 months, as of January 13, 2020. All statistics in the tables below are as of January 14.
Here are the top 3 financial stocks with the best value, the fastest 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)||24.47||5.0||5.3|
|Virtu Financial Inc. (VIRT)||24.58||4.8||5.9|
|Aflac Inc. (AFL)||46.09||32.4||7.2|
- Unum Group: Unum provides disability insurance, group life insurance, and payroll-deducted voluntary benefits for employees primarily at U.S. corporations. On January 15, Unum Group announced a quarterly dividend of $0.285 per share of common stock to be paid on February 19.
- Virtu Financial Inc.: Virtu Financial is a financial services company that acts as a market maker. It provides liquidity, execution services and data, analytics, and other services. On November 6, Virtu posted net income of $199.7 million on revenue growth of 71.6% in Q3 2020, which ended September 30, 2020. The company said that heightened levels of volatility, bid-ask spreads, and trading volumes due to the COVID-19 pandemic helped to boost revenue.
- Aflac Inc.: Aflac is a holding company whose subsidiaries provide supplemental insurance to individuals in the U.S. and Japan. Its products include insurance for risks such as accident and disability, cancer expense, short-term disability, hospital intensive care, and more. On January 12, Aflac announced the national launch of Aflac Dental and Vision Insurance, aimed at sharply expanding its product offerings tied to provider networks. The dental and vision insurance products include a streamlined underwriting process and more than 100 customizable plans.
Fastest Growing Financial Stocks
These are the financial stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Financial Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|White Mountains Insurance Group Ltd. (WTM)||1,010.00||3.1||391.1|
|KKR & Co. Inc. (KKR)||41.20||23.5||316.3|
|Aflac Inc. (AFL)||46.09||32.4||230.8|
- White Mountains Insurance Group Ltd.: White Mountains Insurance Group is a holding company whose subsidiaries provide insurance services. It offers property and casualty insurance and reinsurance products.
- KKR & Co. Inc.: KKR & Co. is a global investment firm engaged in managing investments across multiple asset classes, including private equity, energy, health care, infrastructure, real estate, credit, and hedge funds. KKR & Co. in January announced the final close of two funds: KKR Asia Pacific Infrastructure Investors SCSp and KKR Asia Real Estate Partners. The first of these is a $3.9 billion fund focused on infrastructure-related investments and the second is a $1.7 billion fund focused on opportunistic real estate investments. Both funds target the Asia Pacific region.
- Aflac Inc.: See company description above.
Financial Stocks with the Most Momentum
These are the financial stocks that had the highest total return over the last 12 months.
|Financial Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|PayPal Holdings Inc. (PYPL)||244.90||287.0||112.4|
|SVB Financial Group (SIVB)||442.19||22.9||74.2|
|Virtu Financial Inc. (VIRT)||24.58||4.8||67.2|
|Financial Select Sector SPDR ETF (XLF)||N/A||N/A||4.0|
- PayPal Holdings Inc.: PayPal Holdings is a digital and mobile payments provider catering to consumers and merchants. The company provides online payment solutions to customers around the world.
- SVB Financial Group: SVB Financial Group acts as a holding company for Silicon Valley Bank, a commercial bank that serves companies in the technology and life sciences industries. Silicon Valley Bank caters to emerging growth and middle-market growth companies throughout Silicon Valley and other parts of California primarily. On January 4, SVB Financial Group announced that it would acquire Boston Private Financial Holdings, Inc. (BPFH), the parent company of Boston Private Bank & Trust Company. Boston Private is a provider of integrated wealth management, trust and banking services. Per the terms of the agreement, Boston Private shareholders will receive SBV stock and cash for a total consideration value of roughly $900 million.
- Virtu Financial Inc.: See above for company description.
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YCharts. "Financial Data." Accessed Jan. 17, 2020.
- Unum Group. "Unum Group declares quarterly dividend of $0.285 per share of its common stock." Accessed Jan. 17, 2021.
Virtu Financial Inc. "Virtu Announces Third Quarter 2020 Results," Pages 2 & 8. Accessed Jan. 18, 2021.
Aflac Inc. "Aflac Expands Product Offerings with New Dental and Vision Insurance." Accessed Jan. 17, 2021.
KKR & Co. Inc. "KKR Closes First Asia Real Estate Fund at US$1.7 billion." Accessed Jan. 17, 2021.
KKR & Co. Inc. "KKR Closes Inaugural Asia Pacific Infrastructure Fund at US$3.9 billion Cap." Accessed Jan. 17, 2021.
SVB Financial Group. "SVB Financial Group To Acquire Boston Private, A Leading Provider Of Wealth Management, Trust And Banking Services." Accessed Jan. 17, 2021.