Top Financial Stocks for July 2022

BFH, AGO, and WRB are top for value, growth, and momentum, respectively

The financial sector is composed 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., The Goldman Sachs Group Inc., and Morgan Stanley.

Financial stocks, represented by an exchange-traded fund (ETF)—the Financial Select Sector SPDR ETF (XLF)—have slightly outperformed the broader market, with a total return of -11.4% compared with the Russell 1000’s total return of -12.6% over the past 12 months. These market performance numbers and all statistics in the tables below are as of June 22, 2022.

Here are the top three 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 that you’re paying less for each dollar of profit generated.

Best Value Financial Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Bread Financial Holdings Inc. (BFH) 41.81 2.1 2.9
Brighthouse Financial Inc. (BHF) 41.42 3.1 3.2
Synchrony Financial (SYF) 29.04 14.6 3.9

Source: YCharts

  • Bread Financial Holdings Inc.: Bread Financial Holdings is a financial services holding company. Through subsidiaries, it provides personalized payment, lending, and saving products, as well as private label and co-brand credit cards and installment loans. On March 23, 2022, Alliance Data announced that it had changed its name to Bread Financial, reflecting the company’s transformation into a financial services company focusing on the consumer market.
  • Brighthouse Financial Inc.: Brighthouse Financial provides annuities and life insurance products throughout the United States.
  • Synchrony Financial: Synchrony Financial provides a broad range of consumer financial services such as credit products, certificates of deposit (CDs), individual retirement accounts (IRAs), savings accounts, and more. On May 24, Synchrony announced that it had extended its partnership with Sweetwater, a leading e-commerce provider of musical instruments and audio gear. The partnership is focusing on enhancing Sweetwater's digital payment solutions and enterprise data sharing. The terms of the partnership were not disclosed.

Fastest Growing Financial Stocks

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 year-over-year (YOY) percentage revenue growth and 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Financial Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Assured Guaranty Ltd. (AGO) 54.65 3.5 600.0 79.5
Upstart Holdings Inc. (UPST) 36.05 3.1 209.1 155.6
First Citizens BancShares Inc. (FCNCA) 643.17 10.3 14.9 124.2

Source: YCharts

  • Assured Guaranty Ltd.: Assured Guaranty is a holding company that, through subsidiaries, offers credit protection products to investors, issuers, and underwriters of public finance and structured finance securities in the U.S. and internationally. Assured Guaranty reported Q1 2022 earnings results on May 5. Net income attributable to the company grew five times compared to a year earlier on substantial revenue growth year-over-year (YOY). The company's insurance segment in particular saw strong improvement over this period.
  • Upstart Holdings Inc.: Upstart Holdings is a holding company with subsidiaries that offers a cloud-based artificial intelligence (AI) lending platform. The platform enables consumers and lenders to easily share data and helps bank partners to reduce the risks by using AI to evaluate potential loans.
  • First Citizens BancShares Inc.: First Citizens BancShares is a financial holding company that’s the product of the January 2022 merger of BancShares and CIT Group, creating a major U.S. financial company with $110 billion in assets. Through its subsidiaries, it provides services including retail and commercial banking and wealth management.

Financial Stocks with the Most Momentum

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 (%)
W. R. Berkley Corp. (WRB) 66.93 17.8 38.8
LPL Financial Holdings Inc. (LPLA) 187.59 15.0 37.1
American Financial Group Inc. (AFG) 134.92 11.5 30.2
Russell 1000 N/A N/A -12.6
Financial Select Sector SPDR ETF (XLF) N/A N/A -11.4

Source: YCharts

  • W. R. Berkley Corp.: W. R. Berkley Corp. is an insurance holding company. It offers property casualty insurance including excess and surplus lines as well as specialty lines. The company serves customers in North America, Europe, South America, Asia, and Australia. On June 15, W. R. Berkley announced a quarterly cash dividend of $0.10 per share to be paid on July 7 to shareholders of record as of June 27. The company also announced a special dividend of $0.50 per share, payable on the same timeline.
  • LPL Financial Holdings Inc.: LPL Financial Holdings operates as a broker-dealer. It provides a brokerage and investment advisory services platform to financial advisors across the U.S. Additionally, LPL offers clearing and compliance, account management and rebalancing, annuities, exchange-traded products, mutual funds, and similar financial products. LPL reported earnings on April 28 for Q1 2022. Net income increased by 3.2% as total revenue climbed by 21.0% YOY. Growth in advisory and brokerage assets and recruited assets helped to drive performance.
  • American Financial Group Inc.: American Financial Group is an insurance holding company. Through subsidiaries, including primarily Great American Insurance Group, the company provides a range of property and casualty insurance for businesses.

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 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.

Article Sources
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  1. YCharts. “Financial Data.”

  2. Bread Financial Holdings, Investor Relations. “Alliance Data Is Now Bread Financial.”

  3. Synchrony Financial. "Synchrony and Sweetwater Extend Financing Partnership and Deepen Innovation on Digital Payment Process."

  4. Assured Guaranty Ltd. "Assured Guaranty Ltd. Reports Results for First Quarter 2022."

  5. W. R. Berkley Corp. "W. R. Berkley Corporation Increases Regular Quarterly Dividend and Declares Special Cash Dividend."

  6. LPL Financial Holdings Inc. "LPL Financial Announces First Quarter 2022 Results," Pages 1, 4.

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