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 51.6% compared to the Russell 1000's total return of 34.3% over the past 12 months. These performance numbers and all statistics in the tables below are as of Sept. 20, 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)||6.80||0.7||1.2|
|Athene Holding Ltd. (ATH)||65.14||12.5||3.5|
|White Mountains Insurance Group Ltd. (WTM)||1,068.60||3.3||4.2|
- UWM Holdings Corp. UWM Holdings is a holding company that—through its subsidiaries— underwrites and provides closing documentation for residential mortgage loans. On Aug. 16, the company reported that net income plunged in Q2 2021, ended June 30. Results for the quarter were hurt by a $219.1 million decline in the fair value of mortgage servicing rights.
- Athene Holding Ltd.: Athene Holding is a holding company that provides issuance, reinsurance, and other services globally related to retirement savings products. The company declared preferred stock dividends on Series A, B, C, and D non-cumulative preference shares on Aug. 31. These dividends are payable on Sept. 30 to shareholders of record as of Sept. 15, 2021.
- White Mountains Insurance Group Ltd.: White Mountains Insurance Group is a diversified insurance and related financial services company. It offers property and casualty insurance as well as reinsurance products to customers in the U.S. and Bermuda.
These are the top financial stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest-Growing Financial Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|The Carlyle Group Inc. (CG)||47.02||16.8||522.0||139.3|
|American Express Co. (AXP)||160.57||127.6||865.5||34.6|
|MGIC Investment Corp. (MTG)||14.77||5.0||1,000||1.3|
- The Carlyle Group Inc.: The Carlyle Group is a global investment firm focusing on corporate private equity, real assets, global credit, and investment solutions. On July 29, the company reported a nearly more than six-fold increase YOY in net income attributable to common stockholders as revenue surged in Q2 2021, ended June 30.
- American Express Co.: American Express is a global payment and travel company. The company offers charge and credit payment cards as well as travel-related services.
- MGIC Investment Corp.: MGIC Investment is a private mortgage insurance service provider. The company serves thrifts, mortgage bankers and brokers, commercial banks, and similar institutions in the U.S. and Puerto Rico. On Aug. 4, net income grew nearly 10-fold on a small gain in revenue YOY for Q2 2021, ended June 30. The company said results for the quarter were positively impacted by the credit quality of its insurance, a strong housing market, decreasing numbers of new delinquencies, and generally improving economic conditions.
These are the financial stocks that had the highest total return over the past 12 months.
|Financial Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Western Alliance Bancorp (WAL)||95.89||10.0||187.0|
|Signature Bank (SBNY)||250.88||15.2||182.2|
|Assured Guaranty Ltd. (AGO)||46.24||3.4||147.5|
|Financial Select Sector SPDR ETF (XLF)||N/A||N/A||51.6|
- Western Alliance Bancorp: Western Alliance Bancorp is a multi-bank holding company. The company's subsidiaries provide banking and financial services to customers in states including Nevada, California, and Arizona.
- Signature Bank: Signature Bank is a full service commercial bank. The company serves privately owned business clients as well as their owners and senior managers. Signature Bank provides investment, brokerage, asset management, and insurance products.
- Assured Guaranty Ltd.: Assured Guaranty offers financial guaranty insurance and reinsurance products. The company provides guaranties, including structured and infrastructure finance for customers worldwide. The company reported on Aug. 5 a that net income attributable to Assured Guaranty plunged YOY as total revenue fell 26.0% in Q2 2021, ended June 30. Still, shareholders’ equity, adjusted operating shareholders’ equity, and adjusted book value stood at all-time highs on a per-share basis for the quarter, thanks to strong insurance production and rising gross premium volume.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "Financial Data." Accessed Sept. 21, 2021.
UWM Holdings Corp. "UWM Holdings Corporation Announces Second Quarter 2021 Results." Accessed Sept. 21, 2021.
Athene Holding Ltd. "Athene Holding Ltd. Declares Third Quarter 2021 Preferred Stock Dividends." Accessed Sept. 21, 2021.
The Carlyle Group Inc. "Carlyle Reports Second Quarter 2021 Financial Results," Pages 5, 7. Accessed Sept. 21, 2021.
MGIC Investment Corp. "MGIC Investment Corporation Reports Second Quarter 2021 Results." Accessed Sept. 21, 2021.
Assured Guaranty Ltd. "Assured Guaranty Ltd. Reports Results for Second Quarter 2021." Accessed Sept. 21, 2021.