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Financial Sector Stocks To Buy ##TOP##


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financial sector stocks to buy


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While formally counted as financial stock, in some ways Berkshire Hathaway defies categorization. This holding company owns a portfolio of name-brand companies spanning industries in nearly every corner of the economy, from recreational vehicle manufacturers, utilities and insurance firms, to real estate brokerages, newspaper publishing and retail.


JPMorgan Chase is the largest bank in both the United States and in the world by market capitalization. Named after John Pierpoint Morgan, a famous 19th-century banker and financier, the New York City-based company has played a leading role in shaping the U.S. and global financial industry.


Headquartered in Charlotte, N.C., Bank of America is the second largest bank in the U.S. Like JPM, it offers commercial banking services to individuals and small businesses as well as investment banking. During the financial crisis of 2008, Bank of America purchased the investment bank Merrill Lynch, which it now uses to run wealth management services.


Today, China Construction Bank operates as a full-service financial services organization for individuals and companies. It has hundreds of millions of customers and operates in 31 countries and regions, including China. Based in Beijing, China Construction Bank promotes its strong government ties, which helps it be a trusted part of the national financial system.


More regulated after the Great Recession. The financial crisis of 2008 exposed problems in the financial sector that governments around the world have worked to address with regulation. Today, financial firms are required to take more measures to avoid trouble, like holding higher minimum capital levels to protect against losses. This reduces their risk compared to the sector in the past.


Chance for government support in recessions. The health of the financial sector has a direct bearing on the health of the global economy. As a result, financial firms can count on special support during a recession or a financial crisis. When banks ran into financial trouble during the Great Recession, for instance, governments bailed many of them out.


Innovation from fintech. Financial sector stocks have benefitted from innovations like blockchain, mobile payment apps and robo-advisors, laying the groundwork for more sector growth.


Cyclical performance during recessions. Financial stocks are cyclical and sensitive to economic downturns. When people and businesses are struggling, they take out fewer loans, invest less and spend less on their credit cards, reducing revenue for financial companies. Not to mention, they may stop making payments on their existing loans.


Disruption from technology. While the fintech innovations are exciting for new up and comers, they could disrupt established banks and other financial companies, adding an extra risk for their long-term prospects.


Experts recommend that non-professional investors take a diversified approach to investing. Rather than buying individual stocks, check out exchange-traded funds (ETFs) and index funds. Diversified funds let you benefit from industry gains while avoiding the pitfalls of single stocks. You can find the right fund using screeners available on your brokerage platform.


David is a financial writer based out of Delaware. He specializes in making investing, insurance and retirement planning understandable. Before writing full-time, David worked as a financial advisor and passed the CFP exam.


In 2021, financial stocks delivered a total return (price appreciation plus dividends) of 35%. Only energy (+55%) and real estate (+46%) generated superior returns. (For context, the S&P 500's total return for 2021 came to +28.7%.)


Financial stocks are holding up their end of the bargain in the new year as well. As of Feb. 3, the S&P 500's year-to-date total return came to -6.0%. The index's financial sector, however, delivered a total return of +1.0% over the same span.


Be that as it may, not all financial stocks are created equal. A rising tide might lift all boats, but some sector names are forecast to be more buoyant than others. So we turned to Wall Street analysts to find the best financial stocks in the S&P 500 to buy for 2022, using data from S&P Global Market Intelligence.


Several of the 13 analysts issuing opinions on AJG have it among their best financial stocks to buy for 2022. Six rate it at Strong Buy, three say Buy, three have it at Hold and one says Sell. That works out to a consensus recommendation of Buy, per S&P Global Market Intelligence.


Raymond James analyst C. Gregory Peters rates the stock at Outperform (the equivalent of Buy), noting that a compelling valuation and a "bullish outlook for growth within the insurance brokerage industry through 2023" makes AJG one of the "most attractive insurance brokerage stocks."


Their average target price of $53.70 gives shares implied upside of about 27% in the next 12 months or so. As with many other financial sector names, analysts expect unusually high profit growth going forward.


Indeed, the Street forecasts Synchrony Financial to generate average annual EPS growth of more than 29% over the next three to five years. That easily places SYF among not just the best financial stocks to buy for 2022, but for the next few years.


Indeed, Wedbush analyst Peter Winter (Outperform) cites valuation and the fact that the lender's loan momentum is "starting to pick up" as reasons to rank CFG among the best financial stocks to buy for 2022.


RJF is up almost 8% for the year-to-date, vs. a decline of 6% for the S&P 500. Investors are rewarding the diversified financial services firm for posting record fiscal first-quarter results, where robust net inflows at its private client and asset management divisions helped lead the charge.


An undervalued stock, an underappreciated acquisition and some new business streams make Intercontinental Exchange (ICE (opens in new tab), $127.89) one of the best financial stocks to buy for 2022, analysts say.


S&P Global earns a place among the best financial stocks to buy for 2022 thanks to a loaded bull camp. Of the 13 analysts issuing opinions on SPGI, seven rate it at Strong Buy and four say Buy, while just two call it a Hold.


A low-priced stock also factors into the Street's positive attitude. At 8.8 times analysts' 2022 EPS forecast, RE trades at a steep discount to its own five-year average of 11.7, per Refinitiv Stock Reports Plus. Moreover, shares trade at a 59% discount to the S&P 500 on a forward earnings basis. That makes Everest Re one of 2022's best financial stocks to buy for bargain hunters.


Assurant is one of the top financial stocks to buy for 2022, though admittedly, that opinion comes from a small crowd. Of the seven analysts covering AIZ, four rate it at Strong Buy and three say Buy. Their average target price of $194.17 gives the stock implied upside of about 28% in the next 12 months or so.


Signature Bank (SBNY (opens in new tab), $310.78) gets the highest consensus recommendation of any financial sector stock in the S&P 500. Shares are down with the rest of the market so far this year, but the Street says it's time to buy the dip.


"We reiterate our Strong Buy rating on SBNY shares following its release of fourth-quarter financial results that included strong EPS and pretax pre-provision income beats, as well as explosive balance sheet growth," writes Raymond James analyst David Long. "The bank's highly asset sensitivity position remains in place, leaving it well positioned for higher bond yields and rate hikes."


A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.


Benjamin Graham, who is widely known as "the father of value investing," argued that defensive stocks should be moderately priced, have a good record of paying dividends and be conservatively financed.


In addition, the Dow stock is very inexpensive at just 12 times earnings projected for this year. Combined with its strong free cash flow and its high dividend yield, investors should consider PFE as one of the best defensive stocks going forward.


As a result, investors can continue to expect that Coca-Cola will keep raising its dividend as it has for the past 60 years straight. That is quite an achievement, and is likely one reason why KO is one of Warren Buffett's favorite stocks. The famed value investor and CEO of Berkshire Hathaway (BRK.A (opens in new tab)) has held shares in the company for almost 35 years, since 1988. Berkshire's stake in KO stock is now up to 9.25%, according to Coca-Cola's latest proxy.


Given that KO is at just 27 times this year's earnings and 23 times next year's earnings, it looks moderately priced, given its growth. Along with its 3% yield, KO is one of the best defensive stocks to buy.


What's more, XOM is one of the best value stocks at the moment, trading at just 9.9 times forward earnings. Moreover, Exxon has grown its dividend every year over the past 20 years, and its 3.5% dividend yield is more than covered by expected cash flow going forward. These points make XOM stock one of the best defensive stocks for investors right now. 041b061a72


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