Financial firms serve as the backbone of the economy, providing essential services from lending and investment management to risk management and payment processing. But worries about economic uncertainty and potential market volatility have kept sentiment in check, and over the past six months, the industry has tumbled by 1.3%. This performance was discouraging since the S&P 500 returned 8.4%.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here are two resilient financials stocks at the top of our wish list and one we’re passing on.
One Financials Stock to Sell:
Enova (ENVA)
Market Cap: $4.73 billion
Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE:ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.
Why Does ENVA Fall Short?
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Annual earnings per share growth of 8.5% underperformed its revenue over the last five years, showing its incremental sales were less profitable
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High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Enova’s stock price of $233.33 implies a valuation ratio of 14x forward P/E. If you’re considering ENVA for your portfolio, see our FREE research report to learn more.
Two Financials Stocks to Buy:
Euronet Worldwide (EEFT)
Market Cap: $2.52 billion
Operating a global network of over 47,000 ATMs and 821,000 point-of-sale terminals across more than 60 countries, Euronet Worldwide (NASDAQ:EEFT) provides electronic payment solutions including ATM services, prepaid product processing, and international money transfer services.
Why Is EEFT a Top Pick?
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11.2% annual revenue growth over the last five years surpassed the sector average as its products resonated with customers
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Share buybacks catapulted its annual earnings per share growth to 32.3%, which outperformed its revenue gains over the last five years
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Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $77.18 per share, Euronet Worldwide trades at 6.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
American Express (AXP)
Market Cap: $217.3 billion
Recognizable by its iconic green logo and the slogan “Don’t leave home without it,” American Express (NYSE:AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.