In this article, we discuss 12 high growth financial stocks to buy. If you want to see more stocks in this selection, check out 5 High Growth Financial Stocks To Buy.
The financial services industry is facing difficult circumstances due to a complex combination of factors including high inflation, unpredictable interest rates, supply chain disruptions, and slowing economies. Regulators are focused on ensuring that companies prioritize their financial and operational resilience while continuing to provide support to their customers. The immediate future will require close attention to disruptive economic factors, and lenders will need to demonstrate to supervisors how they are managing credit risks. Insurance companies and investment funds may also experience pressure related to credit in their portfolios, and may need to strengthen their credit teams if the number of defaults and corporate restructurings increases.
Despite the challenges faced by several wealth management firms in 2022, the prevailing market conditions could persuade hesitant sellers to yield to larger banks that can absorb the escalating compliance expenses and use their current technology platforms to promote the digitization initiative that many smaller private banks have not been able to achieve with their current infrastructure.
In the last two years, the financial services sector has proven its capacity to effectively handle extraordinary levels of ambiguity. Whether in real estate, insurance, investment management, or banking and capital markets, financial service providers worldwide responded to the pandemic with exceptional resilience and flexibility, assisting individuals, businesses, and governments in their recovery efforts. Some of the top high growth financial stocks to invest in include M&T Bank Corporation (NYSE:MTB), S&P Global Inc. (NYSE:SPGI), and East West Bancorp, Inc. (NASDAQ:EWBC). Investors can also check out 12 Best Financial Dividend Stocks To Buy and 11 Best Financial Services Stocks To Buy Now.
Our Methodology
We used a stock screener and filtered for financial companies with year-over-year quarterly revenue growth of more than 20%. From the resultant dataset, we selected the financial stocks with the highest revenue growth rates as of the end of the third and fourth quarter of 2022, according to the latest data available for each firm. The list is arranged in ascending order of the year-over-year quarterly revenue growth rate.
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High Growth Financial Stocks To Buy
12. Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG)
Number of Hedge Fund Holders: 12
Quarterly Revenue Growth YoY as of December 30, 2022: 22.00%
Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) was founded in 1880 and is headquartered in Tokyo, Japan. It operates as the bank holding company for MUFG Bank, providing financial products and services in Japan, the United States, Europe, Asia/Oceania, and internationally. On February 2, Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) reported 9-month GAAP earnings per share of ¥27.42.
On December 15, Goldman Sachs analyst Makoto Kuroda initiated coverage of Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) with a Buy recommendation and a price target of 1,010 yen. The analyst also included the stock on Goldman’s Conviction List. Kuroda believes that MUFG has potential for growth from both domestic and international bank lending, as well as from steady improvements in its U.S. corporate clients business. According to the analyst’s research note, investors might anticipate slightly higher profit levels than the market consensus.
According to Insider Monkey’s third quarter database, 12 hedge funds held stakes worth $30.4 million in Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG), compared to 12 funds in the prior quarter worth $22.8 million. Ben Levine, Andrew Manuel, and Stefan Renold’s LMR Partners held the biggest stake in the company, comprising 2.50 million shares worth $11.25 million.
Like M&T Bank Corporation (NYSE:MTB), S&P Global Inc. (NYSE:SPGI), and East West Bancorp, Inc. (NASDAQ:EWBC), Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is one of the top high growth financial stocks to monitor.
11. Regions Financial Corporation (NYSE:RF)
Number of Hedge Fund Holders: 32
Quarterly Revenue Growth YoY as of December 30, 2022: 22.7%
Regions Financial Corporation (NYSE:RF) was founded in 1971 and is headquartered in Birmingham, Alabama. It is a financial holding company that provides banking and bank-related services to individual and corporate customers. It operates through three segments – Corporate Bank, Consumer Bank, and Wealth Management. On January 20, Regions Financial Corporation (NYSE:RF) reported a Q4 GAAP EPS of $0.70 and a revenue of $2 billion, beating Wall Street estimates by $0.04 and $50 million, respectively. Revenue for the quarter increased 22.7% on a year-over-year basis, making it one of the top high growth financial stocks to invest in.
On January 23, Truist analyst Jennifer Demba raised the firm’s price target on Regions Financial Corporation (NYSE:RF) to $27 from $24 and kept a Buy rating on the shares after its Q4 earnings beat. The analyst believes that the company is still in the early stages of growth in various business lines and has better protection against declining interest rates compared to its competitors. Additionally, Regions Financial Corporation (NYSE:RF) is focused on controlling expenses. The analyst further noted that as credit costs become normal for the industry, the company’s disciplined lending practices should become more apparent.
According to Insider Monkey’s third quarter database, 32 hedge funds were long Regions Financial Corporation (NYSE:RF), compared to 28 funds in the prior quarter. Richard S. Pzena’s Pzena Investment Management is the largest stakeholder of the company, with 3.3 million shares worth $66.8 million.
10. Western Alliance Bancorporation (NYSE:WAL)
Number of Hedge Fund Holders: 25
Quarterly Revenue Growth YoY as of December 30, 2022: 25.0%
Western Alliance Bancorporation (NYSE:WAL) was founded in 1994 and is headquartered in Phoenix, Arizona. It operates as the bank holding company for Western Alliance Bank that provides banking products and services primarily in Arizona, California, and Nevada. Western Alliance Bancorporation (NYSE:WAL) is one of the top high growth financial stocks to invest in. On February 15, the company declared a $0.36 per share quarterly dividend, in line with previous. The dividend is payable on March 3, to shareholders of record on February 17.
On January 26, Stephens analyst Andrew Terrell raised the firm’s price target on Western Alliance Bancorporation (NYSE:WAL) to $86 from $80 and kept an Overweight rating on the shares. In a research note to investors, the analyst explained that while Western Alliance Bancorporation (NYSE:WAL)’s Q4 EOP deposits may have surprised some people, the rebound in deposits during Q1 of the current financial year, as well as the guidance for FY23, have provided additional reassurance. The analyst still believes that Western Alliance Bancorporation (NYSE:WAL) has a strong credit quality profile, high returns compared to its peers, and better growth in a challenging environment.
According to Insider Monkey’s Q3 data, 25 hedge funds were long Western Alliance Bancorporation (NYSE:WAL), compared to 35 funds in the prior quarter. Lansing Davis’ Davis Capital Partners is the biggest stakeholder of the company, with 2.40 million shares worth $157.7 million.
Here is what ClearBridge Investments SMID Cap Growth Strategy has to say about Western Alliance Bancorporation (NYSE:WAL) in its Q4 2021 investor letter:
“Another new addition was Western Alliance Bancorp (WAL), an Arizona-based community lender. WAL maintains our banking exposure as we have begun to exit SVB Financial due to capitalization. WAL has made a number of strategic niche acquisitions in the past decade and continues to demonstrate above-industry loan growth and good credit metrics.”
9. The Toronto-Dominion Bank (NYSE:TD)
Number of Hedge Fund Holders: 22
Quarterly Revenue Growth YoY as of October 30, 2022: 35.10%
The Toronto-Dominion Bank (NYSE:TD) was founded in 1855 and is headquartered in Toronto, Canada. The company provides financial products and services in Canada, the United States, and internationally. It operates through Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments. It is one of the premier high growth financial stocks to invest in.
On February 17, Scotiabank raised the firm’s price target on The Toronto-Dominion Bank (NYSE:TD) to C$104 from C$100 and maintained a Sector Perform rating on the shares.
According to Insider Monkey’s Q3 data, 22 hedge funds were bullish on The Toronto-Dominion Bank (NYSE:TD), compared to 19 funds in the prior quarter. D E Shaw is a significant position holder in the company, with 648,901 shares worth nearly $40 million.
8. Comerica Incorporated (NYSE:CMA)
Number of Hedge Fund Holders: 45
Quarterly Revenue Growth YoY as of December 30, 2022: 36.0%
Comerica Incorporated (NYSE:CMA) is a Texas-based provider of financial products and services. The company operates through Commercial Bank, Retail Bank, Wealth Management, and Finance segments. On January 19, Comerica Incorporated (NYSE:CMA) reported a Q4 GAAP EPS of $2.58 and a revenue of $1.02 billion, outperforming Wall Street estimates by $0.03 and $10 million, respectively. Revenue for the period climbed 36% on a year-over-year basis.
On February 15, Piper Sandler analyst R. Scott Siefers downgraded Comerica Incorporated (NYSE:CMA) to Neutral from Overweight with a price target of $82, up from $77. The analyst attributes the downgrade to the stock’s recent recovery and its current valuation, stating that the risk/reward balance is now more even.
According to Insider Monkey’s third quarter database, 45 hedge funds were long Comerica Incorporated (NYSE:CMA), compared to 38 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 2.37 million shares worth $169 million.
7. Blue Owl Capital Inc. (NYSE:OWL)
Number of Hedge Fund Holders: 26
Quarterly Revenue Growth YoY as of December 30, 2022: 37.1%
Blue Owl Capital Inc. (NYSE:OWL) is a New York-based asset manager that provides comprehensive solutions with a permanent capital base, which allows the company to offer a complete platform to middle market businesses, large alternative asset managers, real estate owners, and tenants. On February 13, Blue Owl Capital Inc. (NYSE:OWL) declared a $0.13 per share quarterly dividend, a 8.3% increase from its prior dividend of $0.12. The dividend is payable on March 6, to shareholders of record on February 24. It is one of the best high growth financial stocks to invest in.
On January 2, Michael Brown, an analyst at Keefe Bruyette, downgraded Blue Owl Capital Inc. (NYSE:OWL) to Market Perform from Outperform and set a price target of $13. He suggested that investors approach alternative managers with caution in 2023 due to his prediction that many of the challenges faced in 2022 will continue to persist.
According to Insider Monkey’s Q3 data, 26 hedge funds were bullish on Blue Owl Capital Inc. (NYSE:OWL), compared to 24 funds in the prior quarter. Alexander West’s Blue Pool Capital is the biggest stakeholder of the company, with 41.15 million shares worth $380 million.
6. Interactive Brokers Group, Inc. (NASDAQ:IBKR)
Number of Hedge Fund Holders: 35
Quarterly Revenue Growth YoY as of December 30, 2022: 40.3%
Interactive Brokers Group, Inc. (NASDAQ:IBKR) was founded in 1977 and is headquartered in Greenwich, Connecticut. The company operates globally as an automated electronic broker. Its focus is on carrying out, processing, and finalizing trades in a variety of financial instruments, such as stocks, options, futures, foreign exchange products, bonds, mutual funds, exchange traded funds, metals, and cryptocurrencies. Interactive Brokers Group, Inc. (NASDAQ:IBKR)’s quarterly year-over-year revenue growth of 40.3% makes it one of the premier high growth financial stocks to invest in.
On January 17, Interactive Brokers Group, Inc. (NASDAQ:IBKR) declared a $0.10 per share quarterly dividend, in line with previous. The dividend is payable on March 14, to shareholders of record on March 1.
Bank of America analysts included Interactive Brokers Group, Inc. (NASDAQ:IBKR) on the “US 1” list on February 2, which consists of the firm’s top investment recommendations from the universe of Buy-rated, U.S.-listed stocks.
According to Insider Monkey’s third quarter database, 35 hedge funds were bullish on Interactive Brokers Group, Inc. (NASDAQ:IBKR), compared to 41 funds in the earlier quarter. Select Equity Group is the leading stakeholder of the company, with 5.60 million shares worth $358 million.
In addition to M&T Bank Corporation (NYSE:MTB), S&P Global Inc. (NYSE:SPGI), and East West Bancorp, Inc. (NASDAQ:EWBC), Interactive Brokers Group, Inc. (NASDAQ:IBKR) is one of the premier high growth stocks to invest in.
LVS Advisory made the following comment about Interactive Brokers Group, Inc. (NASDAQ:IBKR) in its Q3 2022 investor letter:
“The most notable new position this year has been our investment in Interactive Brokers Group, Inc. (NASDAQ:IBKR). I published a detailed write-up (link here) and also appeared on the ‘Yet Another Value Podcast’ (link here) to discuss our IBKR thesis. To boil it down, IBKR benefits from higher interest rates, and the stock was available at an exceptionally cheap price. I believe IBKR represents a particularly good risk/reward bet and have made it our largest position.”
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Disclosure: None. 12 High Growth Financial Stocks To Buy is originally published on Insider Monkey.