Top Financial Stocks for April 2022

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. (WFC), The Goldman Sachs Group Inc. (GS), and Morgan Stanley (MS).

Financial stocks, represented by an exchange-traded fund (ETF)—the Financial Select Sector SPDR ETF (XLF)—have outperformed the broader market, with a total return of 14.6% compared with the Russell 1000’s total return of 13.1% over the past 12 months. These market performance numbers and all statistics in the tables below are as of March 18, 2022.

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 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
Alliance Data Systems Corp. (ADS) 62.53 3.1 3.9
Voya Financial Inc. (VOYA) 66.55 7.1 4.1
Rocket Companies Inc. (RKT) 10.99 1.3 4.7

Source: YCharts

  • Alliance Data Systems Corp.: Alliance Data Systems is a provider of technology-driven payment and lending solutions. It offers credit and savings products as well as digital payment solutions. The company announced in early March that its board of directors has approved a new share repurchase program, under which it is authorized to repurchase up to 200,000 shares of common stock.
  • Voya Financial Inc.: Voya Financial is a financial services company that offers wealth and health solutions as well as investment management. The company’s financial products and services include financial planning, retirement and brokerage accounts, mutual funds, insurance, and more.
  • Rocket Companies Inc.: Rocket Companies is a holding company that, through its subsidiaries, provides a financial technology (fintech) platform offering real estate, mortgage, and financial services.

 

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 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 (%)
Upstart Holdings Inc. (UPST) 125.47 10.6 N/A 284.1
MetLife Inc. (MET) 68.45 56.5 908.8 2.7
Everest Re Group Ltd. (RE) 286.66 11.3 581.2 14.1

Source: YCharts and Upstart Holdings Inc.

    • Upstart Holdings Inc.: Upstart Holdings is a holding company with subsidiaries that offer a cloud-based artificial intelligence (AI) lending platform to make credit more available. The platform also helps bank partners to reduce the risk of lending. The company recently announced that its board of directors has approved a share repurchase program under which the company is authorized to purchase up to $400 million of common stock. An EPS growth rate was not calculated for Upstart in the table above since its EPS in the year-ago quarter, Q4 FY 2020, was so low that it rounded to zero.
    • MetLife Inc.: MetLife is a financial services company. Through its subsidiaries and affiliates, the company offers insurance, annuities, employee benefits, and asset management to individual and institutional clients.
    • Everest Re Group Ltd.: Everest Re Group is a global provider of reinsurance and insurance products and services. It offers property, casualty, and specialty insurance products through its operating affiliates around the world.

 

 

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 (%)
Blackstone Inc. (BX) 122.85 86.0 74.0
Brown & Brown Inc. (BRO) 69.59 19.6 53.3
Ares Management Corp. (ARES) 80.60 14.1 51.9
Russell 1000 N/A N/A 13.1
Financial Select Sector SPDR ETF (XLF) N/A N/A 14.6

Source: YCharts

    • Blackstone Inc.: Blackstone is a global investment company focused on alternative asset classes, including private equity, real estate, credit, and hedge funds, as well as infrastructure, life sciences, insurance, and growth equity. It invests capital on behalf of pensions funds, large institutions, and individuals. The company announced in mid-February that its subsidiary Blackstone Real Estate Income Trust Inc. has agreed to acquire all of the outstanding shares of common stock of Preferred Apartment Communities. The acquisition, which is valued at $5.8 billion, includes 44 high-quality multifamily communities and 54 grocery-anchored retail assets across a number of states. The transaction is expected to close in the second quarter of 2022.
    • Brown & Brown Inc.: Brown & Brown is an independent insurance brokerage firm that provides risk management solutions. It offers various insurance products and services to companies, governmental institutions, professional organizations, families, individuals, and more. The company has entered into several acquisition agreements over the last two months. On March 7, Brown & Brown agreed to acquire Global Risk Partners Ltd., a U.K.-based insurance intermediary, for an undisclosed amount. The transaction is expected to close in the third quarter of 2022. On Feb. 28, 2022, the company agreed to acquire Orchid Underwriters Agency and CrossCover Insurance Services for an undisclosed amount. The transaction is expected to close before April 2022. On Feb. 7, 2022, it agreed to acquire the general insurance operating companies of BdB for an undisclosed amount. The transaction is expected to close in the second quarter of 2022.

 

  • Ares Management Corp.: Ares Management is a global alternative investment manager. It offers various investment solutions across the credit, private equity, real estate, and infrastructure asset classes. The company announced in mid-February that funds managed by its Alternative Credit strategy and Real Estate Group have acquired Capital Automotive LLC from a Brookfield private real estate fund for $3.8 billion. Capital Automotive provides sale-leaseback capital to automotive dealers in the U.S. and Canada.

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