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 worries about economic uncertainty and potential market volatility have kept sentiment in check, and over the past six months, the industry's 3.1% return has trailed the S&P 500 by 4.1 percentage points.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Keeping that in mind, here are two financials stocks boasting durable advantages and one we’re swiping left on.
Two Financials Stocks to Watch:
Northern Trust (NTRS)
Market Cap: $29.9 billion
Founded in 1889 during Chicago's post-Great Fire rebuilding boom, Northern Trust (NASDAQ: NTRS) provides wealth management, asset servicing, and banking solutions to corporations, institutions, families, and high-net-worth individuals globally.
Why Are We Positive On NTRS?
- Share repurchases over the last two years enabled its annual earnings per share growth of 32.1% to outpace its revenue gains
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Northern Trust’s stock price of $161.54 implies a valuation ratio of 14.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Euronet Worldwide (EEFT)
Market Cap: $2.67 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 Are We Backing EEFT?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 11.2% annual sales growth over the last five years
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 20% return on equity demonstrates management’s skill in finding high-return investments
At $70.43 per share, Euronet Worldwide trades at 6.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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