The year 2024 holds a promising future for emerging fintech stocks. As the financial sector undergoes a profound digital overhaul, key players in payments and credit processing are poised to benefit. It is clear that the fintech leaders are not new, and you’ve probably already heard of them before.
These companies monopolize new and existing financial technology infrastructure, and their leverage in the marketplace is unprecedented. Investors can also look forward to fintech’s ability to penetrate cross-border transactions and lift millions of people out of poverty. However, just the simple access to a payment system will be consequential with time and space. Mckinsey and Company estimates fintech revenue to grow 3X faster than the banking sector from 2023 – 2028. This is great news for fintech giants who are diversifying into emerging markets like Brazil, India, and Mexico.
Now, let’s discuss the 3 best fintech stocks to buy before the new year!
Mastercard (MA)
Mastercard (NYSE:MA) is an American multinational payment giant and the second-largest payment processing company globally. The stock is up more than 20% YTD, and Mastercard’s long-term outlook is strong.
One key factor contributing to Mastercard’s appeal is its consistent double-digit revenue growth. Mastercard has demonstrated an ability to drive YOY growth and return cash to shareholders. In Q3 2023, total revenue rose 14% YOY to $6.5 billion. GAAP Earnings Per Share also grew 31%, with operating margin remaining robust at 58.8%. The company has benefited from higher interest rates in 2023, driving profitable growth. But what makes Mastercard a special fintech stock to buy is its ability to return cash to shareholders. The company repurchased 19.2 million shares and distributed $1.6 billion in dividends to shareholders.
American Express (AXP)
American Express (NYSE:AXP) has had a strong 2023 fiscal year driven by higher interest rates. Total card member spending grew 7% YOY, with travel and entertainment categories boosting consumer spending.
Despite tightening financial conditions and higher consumer debt levels, American Express’ credit profile has shown increased resilience. In Q3 2023, the company reported its sixth consecutive quarter of revenue growth. Earnings Per Share also saw robust growth, as they have strengthened their value proposition for their Millenial and Gen Z customers.
Net income saw strong growth of 30% YOY, suggesting their plan has been driving higher profitability. With a forward P/E of 14.75, American Express seems cheaper than its competitors. Investors might consider this fintech stock a sound investment choice through 2028.
Visa (V)
Visa (NYSE:V) is a safe haven for the best fintech stocks to buy. The company has experienced tremendous growth over the last decade, and yet that growth is likely to continue.
For FY23, Visa’s payment volume growth saw strong growth and cross-border payment volume grew 20% YOY. Revenue and EPS also saw growth of 11% and 18%, respectively. Over the last 3 years, Visa has been a beacon of safety in the fintech sector. The company averaged 58% EPS growth in the same period while also increasing its quarterly dividend to $0.52 per share.
Visa’s $25 billion share repurchase program reiterates the company’s long-term commitment to deliver value and return cash to shareholders. CEO Ryan McInerney said ‘’There is tremendous opportunity ahead, and I am optimistic about Visa’s role in the future of payments.’’
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
