Products and services come and go, but people will always exchange money for these resources. Fintech companies thrive thanks to the constant demand for money. Many people use credit cards and loans to buy products. They also use financial services to grow their money and manage their budgets. This backdrop has led to this list of fintech stocks to buy.
Fintech corporations continue to adapt as consumers change. They offer better rewards programs, new financing options, and more resources under the same umbrella. Some fintech stocks can outperform the competition and reward long-term investors. These are some of the top picks to consider.
American Express (AXP)
American Express (NYSE:AXP) is a leading credit and debit card issuer that offers an enticing dividend and a reasonable valuation. The stock has a 19 P/E ratio and a 1.30% dividend yield. A recent 17% dividend hike makes it an enticing pick for dividend growth investors. The stock is up by 16% year-to-date and has gained 92% over the past five years.
The fintech firm doesn’t only deliver with a good valuation, dividend yield, and historical performance. American Express reported 11% year-over-year revenue growth and 23% year-over-year net income growth in the fourth quarter of 2023. Credit card transactions continue to grow, which will benefit the company’s long-term prospects.
Profit margins reached 13.46% in that quarter, and American Express’ commentary suggests those margins will increase. The firm’s full-year guidance suggests revenue growth will range from 9% to 11%. The company’s multi-year ambition is to achieve a steady revenue growth rate of 10% year-over-year while having EPS growth in the mid-teens.
American Express is currently projecting EPS to range from $12.65 to $13.15 in the full year 2024. The midpoint of $12.90 per share indicates a 15.1% year-over-year growth rate from the $11.21 EPS posted in full-year 2023.
Nu Holdings (NU)
Nu Holdings (NYSE:NU) is a rapidly growing Brazilian bank that has grown by 161% over the past year. The digital bank has more than 90 million customers in Brazil, Mexico, and Colombia. It’s the 5th largest financial institution in Latin America based on the number of customers.
The financial institution doesn’t only offer bank accounts. It also has 41 million active credit cardholders, seven million customers with active personal loans, 15 million active customers with investment accounts, and one million active customers with insurance policies. All in all, it’s one of those fintech stocks to buy.
The digital bank attracted 4.8 million new customers in the fourth quarter of 2023. Net income also surged from $58.0 million in Q4 2022 to $360.9 million in Q4 2023. The massive increase helped the firm secure a net profit margin of just below 30%. Revenue almost doubled year-over-year.
Nu Holdings has several opportunities to increase the average value per customer and bring more users into its digital banking ecosystem. The fintech stock has the potential to rally higher to the benefit of long-term investors.
Moody’s (MCO)
Moody’s (NYSE:MCO) is a financial risk management company that helps investors assess the risk of various assets, macroeconomic indicators, and other resources. Shares are up by 31% over the past year and have gained 117% over the past five years. The stock has a 44 P/E ratio and a 0.90% dividend yield. Moody’s recently hiked its dividend by 10.4% year-over-year.
Revenue and earnings growth both came in at good rates. Moody’s reported 15% year-over-year revenue growth and 38% year-over-year net income growth in the fourth quarter of 2023. Moody’s is incorporating generative AI to offer its members more choices and increase retention.
The company uses a recurring revenue model to back its financial strength. Annual recurring revenue reached $2.96 billion in the fourth quarter of 2023. The company saw solid growth rates for Decision Solutions, Research & Insights, and Data & Information. These three segments had annualized recurring revenue year-over-year growth rates of 11%, 7%, and 10% respectively. This makes it one of those fintech stocks to consider.
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.
