Financial providers use their expertise in capital allocation and risk assessment to help facilitate economic growth while offering consumers and businesses essential financial services. But uncertainty about fiscal and monetary policy has tempered enthusiasm, limiting the industry's gains to 10.9% over the past six months. This return lagged the S&P 500's 21% climb.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here is one financials stock poised to generate sustainable market-beating returns and two that may face trouble.
Two Financials Stocks to Sell:
Invesco (IVZ)
Market Cap: $10.55 billion
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE: IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Do We Pass on IVZ?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Flat earnings per share over the last five years underperformed the sector average
- ROE of 5.8% reflects management’s challenges in identifying attractive investment opportunities
Invesco is trading at $23.51 per share, or 9.9x forward P/E. Dive into our free research report to see why there are better opportunities than IVZ.
PROG (PRG)
Market Cap: $1.14 billion
Evolving from its origins as Aaron's, Inc. before rebranding in 2020, PROG Holdings (NYSE: PRG) provides alternative payment solutions including lease-to-own options and second-look credit products for consumers who may not qualify for traditional financing.
Why Do We Avoid PRG?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Earnings per share fell by 6.2% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Tangible book value per share tumbled by 12.9% annually over the last five years, showing financials sector trends are working against its favor during this cycle
PROG’s stock price of $29 implies a valuation ratio of 8.5x forward P/E. To fully understand why you should be careful with PRG, check out our full research report (it’s free for active Edge members).
One Financials Stock to Buy:
EVERTEC (EVTC)
Market Cap: $1.82 billion
Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE: EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.
Why Is EVTC a Top Pick?
- Market share has increased this cycle as its 18.2% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years boosted profitability as its annual earnings per share growth of 19.4% outstripped its revenue performance
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $28.47 per share, EVERTEC trades at 8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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