Financial firms serve as the backbone of the economy, providing essential services from lending and investment management to risk management and payment processing. Still, investors are uneasy as companies face challenges from an unpredictable interest rate and inflation environment. These doubts have caused the industry to lag recently as financials stocks have collectively shed 10.2% over the past six months. This performance was discouraging since the S&P 500 stood firm.
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 are three resilient financials stocks at the top of our wish list.
Morningstar (MORN)
Market Cap: $6.51 billion
Founded in 1984 by Joe Mansueto with just $80,000 in personal savings, Morningstar (NASDAQ: MORN) provides independent investment data, research, and analysis tools that help investors, advisors, and institutions make informed financial decisions.
Why Will MORN Outperform?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 12% annual sales growth over the last five years
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROE punches in at 16.1%, illustrating management’s expertise in identifying profitable investments
Morningstar’s stock price of $164.56 implies a valuation ratio of 15.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Moelis (MC)
Market Cap: $3.97 billion
Founded in 2007 by veteran banker Ken Moelis during the lead-up to the financial crisis, Moelis & Company (NYSE: MC) is an independent investment bank that provides strategic and financial advisory services to corporations, financial sponsors, governments, and sovereign wealth funds.
Why Is MC on Our Radar?
- Annual revenue growth of 33.6% over the past two years was outstanding, reflecting market share gains this cycle
- Additional sales over the last two years increased its profitability as the 311% annual growth in its earnings per share outpaced its revenue
- ROE punches in at 40.7%, illustrating management’s expertise in identifying profitable investments
Moelis is trading at $54.11 per share, or 15.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Berkshire Hathaway (BRK.A)
Market Cap: $1.03 trillion
Led by legendary investor Warren Buffett since 1965, transforming it from a struggling textile manufacturer into a corporate giant, Berkshire Hathaway (NYSE: BRK.A) is a diversified holding company that owns businesses across insurance, railroads, utilities, manufacturing, retail, and services sectors.
Why Do We Watch BRK.A?
- Earnings growth has comfortably beaten the peer group average over the last two years as its EPS has compounded at 18.9% annually
- Balance sheet strength has increased this cycle as its 15.9% annual tangible book value per share growth over the last five years was exceptional
- Industry-leading 13.2% return on equity demonstrates management’s skill in finding high-return investments
At $718,244 per share, Berkshire Hathaway trades at 22.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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