There are some exciting top-end financial stocks in the market.
Tough times in 2020 have affected the working of various financial organizations. Though the financial sector is comprised of companies that offer different services including payment, loans, insurance, savings, and money management.
The financial stocks belong to a vast scale of firms that involve commercial banking, credit cards, e-banking, brokerage, insurance, and asset management.
With things turning around, the financial industry is also getting a stronghold this year. Moreover, there are a lot of expectations from the Biden administration to make a quick economic recovery. Based on this optimistic approach the market is performing far better. So, let’s have a look at the three top financial stocks for investment this year.
JPMorgan (JPM) is the largest US bank, and the largest company in the financial sector, with over market value of 426.21 billion. JPMorgan was one of those few companies that survived the financial crisis—managed by a legend, the CEO of the company Jamie Dimon. The company is again doing pretty well in yet another macroeconomic crisis.
To add to the point, JPMorgan is too big to fail—as it continues to pass mandated stress tests regularly. Recently, Moody’s completed the periodic review of ratings of JPMorgan. Based upon the ratings, the a2 BCA reflects the diversification and competitive position of the company’s four franchises, including Commercial Banking, Corporate and Investment Banking, Consumer and Community Banking, and Asset and Wealth Management.
The company was rated to skillfully improve its offerings and profitability during the pandemic. JPMorgan’s business segment has a significant scale. The company produced around $53 billion of pre-provision profits in 2020, allowing the bank to absorb $17.5 billion in credit provisions during this period.
LendingClub Corp. (LC)
LendingClub Corp. (LC) is the first P2P lending firm to register its offering as securities with the SEC. The shares of the lending firm have been trading on a higher side since Dec. 2020. Late last year, the company announced the approval of its acquisition of Radius Bancorp by the Office of the Comptroller of the Currency.
The company just announced that it has closed the acquisition of Radius Bancorp and its digital bank subsidiary, Radius Bank. The new addition to its ecosystem would strengthen the digital network and the complementary businesses of LendingClub. In the future, this would drive more revenue.
In Q3 2020, the company reported a non-GAAP EPS of $0.25, surpassing the analyst estimates by $0.31. While the revenue was also above the estimates by $16.6 million, reported at $74.7 million.
The company also improved its credit score recently. With an improvement to its Relative Strength (RS) Rating on Thursday, the score was upgraded from 88 to 92.
American Express (AXP)
One of the leading US multinational financial services corporations, American Express (AXP) is the least favorite for investors among JPM and LC. AXP stock after gaining more than 80% since March 2020 has little chance of upside.
Forbes highlighted that AXP shares are currently trading close to their fair share price i.e., around $130. However, the growing share price has enthused investors. We know that the market has been unpredictable in the pandemic. So, it’s hard to forecast how the stock will behave in the coming time.
The company reported low third-quarter outcomes, with net income at $1.1 billion compared to $1.8 billion last year. American Express (AXP) management highlighted that things are improving and the current circumstances are better than the past two quarters.
If the company reports better Q4 results, the stock might pump—going against the expectations of Forbes.