Financial technology companies make it easier for people to manage their money, borrow extra cash and grow their savings through various investments. Many firms have advanced over the years, allowing you to view your finances from a single dashboard.
These innovations have resulted in plenty of gains for long-term investors. Some fintech stocks have continued to march forward while presenting long-term opportunities for patient investors. Other fintech stocks have been trading sideways but look primed to change the script.
While people have been using various apps and financial products for decades, the fintech market is still projected to maintain a compounded annual growth rate of 16.5% through 2032. Tailwinds remain strong for the industry as payment processing, P2P lending, fraud detection, blockchain technology and other solutions expand what’s possible in the space. The industry’s success has also resulted in plenty of returns for long-term investors. These are some of the top fintech stocks to buy.
Robinhood (HOOD)
Robinhood (NASDAQ:HOOD) has made several innovations in the financial industry that have forced other brokerage firms to act. The company ushered in commission-free stock trades and has been innovating in other areas as well. Robinhood Gold is the company’s latest product, which will likely change the financial landscape.
A Gold membership offers 5% APY on sitting cash, 1% boosts for every qualifying deposit, a credit card with unlimited 3% cashback on all purchases, 3% IRA matches and other perks. The membership costs $50/yr, which is lower than many credit cards with fewer perks. Robinhood launched its credit card and other parts of Robinhood Gold a few months ago. This offering can significantly change the fintech industry within a few years.
While Robinhood stock is still well removed from its highs, it is rebounding. Shares have gained 83% year-to-date, prompting the company to amass a $20 billion valuation.
Visa (V)
Visa (NYSE:V) is a leading issuer of credit and debit cards that regularly reports net profit margins above 50%. The firm generates plenty of cash flow that it gives out to investors as dividends and stock buybacks. The company distributed $3.8 billion to investors to investors in the second quarter of fiscal 2024. That quarter also featured 10% year-over-year revenue and net income growth rates. Cross-border volume growth was a key business driver, up by 16% compared to last year’s quarter.
Visa is only up by 3% year-to-date but has gained 54% over the past five years. Although the stock has underperformed the S&P 500 and the Nasdaq Composite, it’s less likely to experience a sharp downturn amid an economic contraction. People continue to use their credit and debit cards in any economy, which results in steady revenue and earnings for the company. The stock trades at a 33 P/E ratio and offers a 0.78% yield. Although the yield is low, Visa has had an impressive dividend growth rate of double-digit growth for several years.
Nu Holdings (NU)
Nu Holdings (NASDAQ:NU) is a Brazilian digital bank that closed out the first quarter with 99.3 million customers. That’s a 26% year-over-year improvement. Even better, 82.6 million of the customers are still active.
The fintech firm offers several financial products: bank accounts, brokerage accounts, personal loans, credit cards and more. It’s been a big hit in Latin America and has regularly posted impressive growth rates. Revenue increased by 69% year-over-year to $2.74 billion, while net income reached $378.8 million. That figure represents a 167% year-over-year growth rate.
Nu Holdings has been off to a strong start with a 57% year-to-date gain. The stock has a 50 P/E ratio, but elevated earnings growth makes the valuation easier to justify. Wall Street analysts don’t seem to mind the valuation as they get increasingly bullish on the stock. Nu Holdings is currently rated as a Strong Buy and has a projected 9% upside from current levels.
On the date of publication, Marc Guberti 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
