In this article, we will look at the 10 High Growth Financial Stocks To Invest In.
Financial Services Sector Outlook 2025
In October 2024, Deloitte released its banking and capital market outlook 2025. The report highlights that bank leaders are experiencing uncertainty about how economic conditions will evolve during the year. While inflation has decreased and interest rates are falling, concerns remain regarding sluggish economic growth, geopolitical tensions, and regulatory challenges that could affect bank performance. As per the report the US economy has outperformed expectations in 2024 with GDP growth estimated at 2.7%. However, this growth momentum is expected to slow down in 2025, with GDP growth anticipated to decelerate to 1.5% under a baseline scenario. There is potential for slightly higher growth at 1.9% if productivity increases due to technological advancements. However, a pessimistic scenario could result in growth as low as 1.0% if inflation remains high and geopolitical issues escalate.
The report highlighted that consumer spending will be tested in 2025, particularly as total consumer debt has reached an all-time high of $17.7 trillion as of mid-2024. Moreover, companies are also experiencing declining cash reserves and increasing debt maturity, which could impact their financial stability and borrowing capacity moving forward. On top of this, the Federal Reserve is also expected to implement several rate cuts in 2025, which will help alleviate some pressures on consumers but might not be enough to reduce deposit costs for banks.
As per Deloitte, the primary challenge for banks will be achieving sustainable growth amidst these economic headwinds. Executives will need to make strategic decisions regarding interest income strategies as net interest income is projected to decline due to high deposit costs. We have also covered the financial market outlook by Fidelity Investment in 7 Most Undervalued Financial Stocks To Buy According To Analysts, here’s an excerpt from the article:
According to Fidelity’s report, the prospects for the financial industry in 2025 seem promising, backed by positive economic expansion in the U.S. The Fed’s rate reduction in the second half of 2024 will improve confidence and lower credit risk. This will ultimately boost lending and deposits while reducing net interest margins.
In 2025, financial services are going to be much more advanced, driven by AI. According to IBM’s 2024 report, Generative AI is revolutionizing financial services by enhancing customer satisfaction, bringing new features in risk management, and personalized financial solutions. Deloitte’s 2025 investment management outlook projects AI and the changing digital landscape to massively impact the investment management industry in 2025.
With that let’s take a look at the 10 high-growth financial stocks to invest in.
A view of a busy banking hall, customers engaging with banking staff to conduct their financial transactions.
Our Methodology
To curate the list of 10 high-growth financial stocks to invest in, we used the Finviz stock screener and Seeking Alpha. Using the screener we conducted our initial research to get an aggregated list of financial stocks that have grown their 5-year revenue by more than 20%. Next, we cross-checked the 5-year revenue growth from Seeking Alpha and ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s third-quarter hedge funds database.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 High-Growth Financial Stocks To Invest In
10. SouthState Corporation (NYSE:SSB)
5-Year Revenue Growth: 21.79%
Number of Hedge Fund Holders: 20
SouthState Corporation (NYSE:SSB) is a financial services company that offers various banking products including deposit accounts, loans, and credit services. The company also provides wealth management services, commercial banking, and mortgage solutions. It operates in several states including Florida, Texas, Georgia, Alabama, Virginia, and the Carolinas.
On January 27, Gary Tenner, an analyst at D.A. Davidson maintained a Buy rating on the stock, while keeping his price target at $125. During the fiscal fourth quarter of 2024, SouthState Corporation (NYSE:SSB) experienced positive changes characterized by the Federal Reserve’s decision to cut rates. After the rate cut in September, the company saw an increase in customer deposits across all regions, even with reduced deposit rates. This growth was partly seasonal, influenced by municipal deposits during the tax collection period. Excluding a decline in brokered certificates of deposit (CDs), customer deposits grew by 9% on an annualized basis.
As a result, the bank reported a 6% year-over-year increase in revenue for the full year, contributing to a 9% rise in pre-provision revenue for the quarter. In a recent development, SouthState Corporation (NYSE:SSB) has received regulatory approval for its acquisition of Independent Financial, which closed on January 1. This acquisition aligns with the bank’s strategy to expand in high-growth areas like Florida, Texas, and the Carolinas. It is one of the high-growth financial stocks to invest in now.
9. Grupo Financiero Galicia S.A. (NASDAQ:GGAL)
5-Year Revenue Growth: 83.49%
Number of Hedge Fund Holders: 20
Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is a major financial services holding company based in Argentina. It primarily operates through its subsidiaries, with Banco Galicia being the most significant one. The company provides a wide range of financial services, including banking, savings, credit, investment, and insurance. It aims to strengthen its position as one of Argentina’s leading financial service providers while ensuring Banco Galicia remains a key player in the banking sector.
In December, Jorge Kuri, an analyst at Morgan Stanley upgraded the stock from Underweight to Overweight with a price target of $92. The analyst believes that the positive policy reforms from the Argentinian government are likely to stabilize the macroeconomic conditions in the country, subsequently helping Grupo Financiero Galicia S.A. (NASDAQ:GGAL) in the long run. The company faced significant challenges in the fiscal third quarter of 2024. It reported a net income of Ps.83,656 million, which decreased 47% year-over-year. The decline in net income was primarily due to a substantial drop in the operating result, which fell to Ps.436,230 million, representing a 50% decrease from the third quarter of 2023.
However, management remains confident in long-term growth and has strategically acquired 99.99% of HSBC Bank Argentina and related entities. This significantly enhances its presence in the Argentine banking sector. It is one of the high-growth financial stocks to invest in now.
8. RenaissanceRe Holdings Ltd. (NYSE:RNR)
5-Year Revenue Growth: 22.86%
Number of Hedge Fund Holders: 29
RenaissanceRe Holdings Ltd. (NYSE:RNR) is an insurance company that provides insurance and reinsurance services. This means that the company helps other insurers manage their risks by covering some of the losses they might face from large disasters, like hurricanes or earthquakes. Its direct insurance services include Property Insurance and Casualty Insurance. The company is based in Bermuda and operates internationally, providing its services in multiple countries, including the United States, Europe, and Asia.
On January 30, Wells Fargo’s analyst, Elyse Greenspan maintained a Buy rating on the stock with a price target of $227. RenaissanceRe Holdings Ltd. (NYSE:RNR) released its full-year results for fiscal 2024 recently. The latest earnings call indicates growth amidst a challenging environment. The company was able to grow its tangible book value plus accumulated dividends by 26% and the company’s operating income surpassed $2.2 billion. However, as a result of Hurricane Milton negatively impacted the company resulting in $270.5 million in net losses from the event.
Overall, financial success benefited from the strong performances across three key profit drivers including underwriting income, which reached $1.6 billion, net investment income, which reached $1.7 billion, and fee income, which contributed $326.8 million. RenaissanceRe Holdings Ltd. (NYSE:RNR) is one of the high-growth financial stocks to invest in now.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding The Allstate Corporation (NYSE:ALL) in its Q3 2024 investor letter:
“In the Financials sector, we tend to avoid banks that face credit deterioration or rising deposit costs, preferring either asset managers or specialized insurance companies. New to the portfolio this quarter is The Allstate Corporation (NYSE:ALL), a property and casualty insurer. A pullback in its stock price gave us an opportunity to add this position to the portfolio that has been on our radar for some time. Auto and homeowners’ insurance renewal ratios have stabilized. Several key states have given approval for auto insurance price increases and Allstate tactically reduced its coastal homeowners’ coverage.”
7. Futu Holdings Limited (NASDAQ:FUTU)
5-Year Revenue Growth: 62.46%
Number of Hedge Fund Holders: 29
Futu Holdings Limited (NASDAQ:FUTU) is a financial technology company that primarily operates digital brokerage platforms. Its platform called Futu NiuNiu allows users to buy and sell various securities, including stocks, options, and exchange-traded funds (ETFs). It serves customers in China, the United States, Hong Kong, Singapore, Australia, and Japan.
During the fiscal third quarter of 2024, the company reported having grown its paying clients by more than 33.1% year-over-year. Moreover, the number of registered clients also increased by 22.8% to reach 4.3 million. This increase in clients led the total client assets higher to HK$693.4 billion ($89 billion), after a surge of 48.1%. Malaysia was one of the top performers for Futu Holdings Limited (NASDAQ:FUTU) as it contributed the most in terms of the paying clients category.
Management noted that they have experienced positive results from all the key locations, indicating the effectiveness of their product offerings and marketing strategies. Futu Holdings Limited (NASDAQ:FUTU) is one of the high-growth financial stocks to invest in now, with more than 62% 5-year revenue growth and around 30% year-over-year growth in the latest quarter.
6. Kinsale Capital Group, Inc. (NYSE:KNSL)
5-Year Revenue Growth: 40.38%
Number of Hedge Fund Holders: 32
Kinsale Capital Group, Inc. (NYSE:KNSL) is a property and casualty insurance company that specializes in a unique area of the insurance market known as excess and surplus lines (E&S). Their competitive edge lies in providing insurance for risks that are often difficult to insure through standard insurance companies. The company operates across the United States, including all 50 states, Puerto Rico, and the US Virgin Islands.
During the fiscal third quarter of 2024, Kinsale Capital Group, Inc. (NYSE:KNSL) through its business strategy and disciplined underwriting practices increased its earnings per share by 27%. Its gross written premiums grew by 19% year-over-year $448.6 million, indicating a strong demand for its insurance products despite a competitive market. Polen Global SMID Company Growth in its Q3 2024 investor letter indicated their confidence in Kinsale Capital Group, Inc.’s (NYSE:KNSL) ability to navigate through the industry challenges and increase its market share. Here’s what the firm said about the company:
“Kinsale Capital Group, Inc. (NYSE:KNSL) is a specialty insurance company focused on the U.S. excess and surplus lines (“E&S”) market. We see them as uniquely positioned in the E&S insurance market, with solid financial performance and competitive advantages to prepare to continue capturing market share in the face of industry challenges.”
5. Western Alliance Bancorporation (NYSE:WAL)
5-Year Revenue Growth: 22.66%
Number of Hedge Fund Holders: 35
Western Alliance Bancorporation (NYSE:WAL) is a bank holding company that operates primarily through its banking subsidiary, Western Alliance Bank. It provides various financial services including loans, deposits, treasury management, and digital payments.
On January 29, Jared Shaw, an analyst at Barclays maintained a Buy rating on the stock, with a price target of $107. Moreover, Ariel Global Fund also announced initiating a position in the company in its Q3 2024 investor letter. The firm acknowledged that Western Alliance Bancorporation (NYSE:WAL) has faced credit concerns and other headwinds in recent years. However, it believes a restructured balance sheet and diversified portfolio can put the company back on track for long-term growth. During the fiscal fourth quarter of 2024, the company reported an EPS of $1.95 which indicates a significant increase year-over-year. Moreover, the bank also grew its net income by 8.6% on a subsequent basis to reach $216.9 million during the fourth quarter.
Western Alliance Bancorporation (NYSE:WAL) is optimistic about sustaining its earnings trajectory into 2025 through its diversified business strategy and strong credit platforms while maintaining a focus on asset quality amid changing interest rates. Here’s what Ariel Global said about the company:
“Finally, we initiated a position in a bank holding company, Western Alliance Bancorporation (NYSE:WAL). Shares have been impacted by multiple headwinds in recent years including a poorly timed expansion into mortgage services via the acquisition of AmeriHome in 2021, persistent credit concerns amidst the Fed’s rate hikes and then higher deposit costs following the March 2023 banking crisis. However, with a restructured balance sheet and diversified portfolio, we believe WAL is well-positioned for future growth in the current market environment.”
4. HDFC Bank Limited (NYSE:HDB)
5-Year Revenue Growth: 31.09%
Number of Hedge Fund Holders: 41
HDFC Bank Limited (NYSE:HDB) is a prominent private bank in India that provides a wide range of banking and financial services. It offers retail banking, wholesale banking, treasury options, insurance management, and digital banking. The bank has more than 9,000 branches across various cities in the country.
During the fiscal third quarter of 2025, management indicated that the bank is navigating a challenging economic environment characterized by tight liquidity, fluctuating demand, and external uncertainties. Consumer spending in urban areas has slowed down and the Indian rupee has been experiencing depreciation. However, on the bright side, the demand from rural areas has helped balance the slowdown in Urban spending. As a result, HDFC Bank Limited (NYSE:HDB) experienced an increase of 16% in average deposits. Moreover, despite challenges management was able to maintain stable net interest margins of 3.43%, indicating effective interest rate management.
HDFC Bank Limited (NYSE:HDB) has been expanding its operations in the country. Over the past year, the bank has opened over 1,000 new branches. Moreover, the bank in December also announced the expansion of its digital services in Rajasthan, with 40 products and services available through the e-Mitra platform. It is one of the high-growth financial stocks to invest in now.
Artisan Developing World Fund stated the following regarding HDFC Bank Limited (NYSE:HDB) in its Q2 2024 investor letter:
“To reduce the range of investment outcomes further, we may seek investments not only with low revenue variability but with low incremental margin structures. For example, HDFC Bank Limited (NYSE:HDB) in India will have to fund every loan it makes with deposits, and will have to invest incremental profitability in acquiring and servicing customers.”
3. First Citizens BancShares, Inc. (NASDAQ:FCNCA)
5-Year Revenue Growth: 40.63%
Number of Hedge Fund Holders: 46
First Citizens BancShares, Inc. (NASDAQ:FCNCA) is a large financial holding company based in Raleigh, North Carolina that provides retail and commercial banking services to individuals, businesses, and professionals. Its competitive edge lies in its Silicon Valley Banking (SVB), through which it focuses on serving businesses in innovative sectors like technology and healthcare, along with private equity and venture capital firms.
On January 27, Piper Sandler raised its price target for FCNCA from $2,100 to $2,250, while keeping its Neutral rating on the stock. The firm noted that the bank’s fourth-quarter results exceeded expectations, prompting them to raise their financial forecasts for SVB. However, they also expressed caution, suggesting that the current stock price may have already reflected much of the positive earnings news, leading them to remain neutral on investing in the shares at this time.
First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its fiscal fourth quarter of 2024 posted robust growth. The company delivered an EPS of $45.87, while the expectations were $39.13. Moreover, its revenue also grew by 23% year-over-year to $9.33 billion. It is one of the high-growth financial stocks to invest in now.
Greenlight Capital stated the following regarding First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its Q2 2024 investor letter:
“We exited a few positions during the quarter, including, First Citizens BancShares, Inc. (NASDAQ:FCNCA): The bargain acquisition of the corpse of Silicon Valley Bank worked out well. The shares appreciated more than 80% and no longer appear cheap.”
2. KKR & Co. Inc. (NYSE:KKR)
5-Year Revenue Growth: 42.50%
Number of Hedge Fund Holders: 66
KKR & Co. Inc. (NYSE:KKR), is a global investment company that focuses on managing various types of investments. The company offers alternative asset management, capital management, and insurance solutions. It is known for its strategic approach and has a significant presence in multiple markets worldwide.
KKR & Co. Inc. (NYSE:KKR) is strategically positioned in the rapidly expanding alternative asset management industry, which focuses on investment opportunities outside traditional stocks and bonds. It has become a leader in the Asia Pacific region, particularly in Japan which is a major economy and life insurance market. During the fiscal third quarter of 2024, the firm adjusted net income by 50% year-over-year and total operating income by 71% year-over-year, driven by an increase in fee-related income.
Montaka Global Investments in its Q4 2024 investor letter mentioned that KKR & Co. Inc. (NYSE:KKR) is strategically positioned to benefit from various tailwinds. These tailwinds include structural growth in Asian wealth, growth in global private wealth allocations, and the increasing partnerships between issues and alt managers. Here’s what the firm said about KKR & Co. Inc. (NYSE:KKR):
“With a collective US$1.7 trillion in assets under management, and with access to the best talent, capital, and deals all around the world, Blackstone and KKR & Co. Inc. (NYSE:KKR), two of Montaka’s largest holdings, are highly advantaged alternative asset managers.
They are uniquely positioned to benefit from three structural tailwinds that have commenced:
The structural growth in Asian wealth combined with increasing allocation to alts in the region;
The structural growth in US$85 trillion global private wealth allocations to alts; and
The increasing strategic partnerships between insurers and alts managers, which unlocks access to manage the US$30+ trillion assets of the insurance industry…” (Click here to read the full text)
1. Apollo Global Management, Inc. (NYSE:APO)
5-Year Revenue Growth: 77.12%
Number of Hedge Fund Holders: 82
Apollo Global Management, Inc. (NYSE:APO) is a global investment firm that specializes in managing alternative assets and providing retirement services. Investors like the revenue mix of the firm which originates from its position as an asset management operations and annuity provider.
On January 14, Micheal Brown, an analyst at Wells Fargo maintained a Buy rating on the stock, with a price target of $191. The management of Apollo Global Management, Inc. (NYSE:APO) has been focused on following its 5-year plan, which entails an average annual growth of 20% in its Fee-Related Earnings and 10% in supplemental revenue earnings.
During the fiscal third quarter of 2024, the firm delivered results that were in alignment with its plan. The firm achieved record fee-related earnings of $1.5 billion and also grew its credit management fees by 20%. The growth was driven by a strong demand for its credit products. Apollo Global Management, Inc. (NYSE:APO) is one of the high-growth financial stocks to invest in.
Baron FinTech Fund stated the following regarding Apollo Global Management, Inc. (NYSE:APO) in its Q2 2024 investor letter:
“Strength in Tech-Enabled Financials was broad based, led by gains from alternative asset manager Apollo Global Management, Inc. (NYSE:APO) and specialty insurer Arch Capital Group Ltd. Apollo continues to benefit from disruptive trends in financial services, most notably the shift of retirement assets into higher-yielding private credit given the company’s dual role as an asset manager and an annuity provider. “
While we acknowledge the potential of Apollo Global Management, Inc. (NYSE:APO) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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