5 Best Financial Services Stocks To Invest In Right Now

In this article, we will take a look at the 5 best financial services stocks to invest in right now. If you want to explore similar stocks, you can go to 10 Best Financial Services Stocks To Invest In Right Now.

5. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 100

This April, JPMorgan revised its price target on Bank of America Corporation (NYSE:BAC) to $34 from $38 and maintained an Overweight rating on the shares.

Bank of America Corporation (NYSE:BAC) is one of the best financial services stocks to buy now. As of April 14, the stock is trading at a PE multiple of 9x and is offering a forward dividend yield of 2.98%.

100 hedge funds held stakes in Bank of America Corporation (NYSE:BAC) at the end of the fourth quarter of 2022. The total value of these stakes amounted to $37.5 billion. As of December 31, Berkshire Hathaway is the top stockholder in the company and has a position worth $33.4 billion.

Oakmark Funds made the following comment about Bank of America Corporation (NYSE:BAC) in its Q1 2023 investor letter:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation (NYSE:BAC) and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”

4. Berkshire Hathaway Inc. (NYSE:BRK-B)

Number of Hedge Fund Holders: 110

At the close of Q4 2022, 110 hedge funds were long Berkshire Hathaway Inc. (NYSE:BRK-B) and held collective stakes worth $15.7 billion in the company. The stock is one of the best financial services stocks to buy now.

Over the past 3 months, Berkshire Hathaway Inc. (NYSE:BRK-B) has received 1 Buy rating and 1 Hold rating from Wall Street analysts. The stock has an average price target of $353, which represents an upside of 10.40% from current levels. As of April 14, Berkshire Hathaway Inc. (NYSE:BRK-B) has gained 3.17% year to date.

As of December 31, Bill & Melinda Gates Foundation Trust is the largest investor in Berkshire Hathaway Inc. (NYSE:BRK-B) and has disclosed a position worth $7.6 billion.

3. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 115

Wall Street sees upside to PayPal Holdings, Inc. (NASDAQ:PYPL) and the stock is ranked high among the best financial services stocks to invest in right now. On February 10, Wells Fargo analyst Jeff Cantwell raised his price target on PayPal Holdings, Inc. (NASDAQ:PYPL) to $97 from $95 and maintained an Overweight rating on the shares.

115 hedge funds disclosed having stakes in PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of Q4 2022. The total value of these stakes amounted to $5.1 billion. As of December 31, Citadel Investment Group is the dominant investor in the company and has a position worth $481 million.

Renaissance Investment Management made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q4 2022 investor letter:

“Another underperformer in the quarter was PayPal Holdings, Inc. (NASDAQ:PYPL). Despite reporting solid third quarter operating results and announcing new payment agreements with both Apple and Amazon.com, the company guided for a slowdown in e-commerce activity, partly reflecting weakened consumers who are dealing with heightened inflation. However, we still expect growth in PayPal’s core payments platforms to improve in upcoming quarters, driven by easier year-over-year comparisons.”

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 139

Mastercard Incorporated (NYSE:MA) has gone up by 7.39% so far in 2023, as of April 14. The stock is placed second on our list of the best financial services stocks to buy now according to hedge funds.

This January, Barclays analyst Ramsey El-Assal raised his price target on MasterCard Incorporated (NYSE:MA) to $437 from $427 and maintained an Overweight rating on the shares.

At the end of the fourth quarter of 2022, Mastercard Incorporated (NYSE:MA) was spotted on 139 investors’ portfolios that held stakes worth $15.6 billion in the company. Of those, Akre Capital Management was the largest shareholder in the company and held a stake worth $2 billion.

Oakmark Funds made the following comment about Mastercard Incorporated (NYSE:MA) in its Q1 2023 investor letter:

“A brief discussion of Mastercard Incorporated (NYSE:MA) is also appropriate given we have held this company for nearly 13 years. It’s the 13th-largest contributor to performance for the Fund in our nearly 24-year history, but the largest in total dollars and percentage terms at nearly 1760%. While a terrific company, there were better priced alternatives in the quarter, so we sold our position. Our history with Mastercard fits the adage that all good things must come to an end.”

1. Visa Inc. (NYSE:V) 

Number of Hedge Fund Holders: 177

Wall Street is bullish on Visa Inc. (NYSE:V) and the stock is one of the best financial services stocks to buy now. On March 3, Jefferies reiterated its $260 price target and a Buy rating on Visa Inc. (NYSE:V).

As of April 14, Visa Inc. (NYSE:V) has returned 26.33% to investors over the past 6 months and is offering a forward dividend yield of 0.77%.

At the end of the fourth quarter of 2022, 177 hedge funds were eager on Visa Inc. (NYSE:V) and held collective positions worth $26.4 billion in the company. Of those, TCI Fund Management was the top investor in the company and disclosed a position worth $4.1 billion.

Here is what Baron Funds had to say about Visa Inc. (NYSE:V) in its Q4 2022 investor letter:

“Shares of global payment network Visa Inc. (NYSE:V) increased after reporting strong quarterly results, with 19% growth in revenue and EPS despite currency headwinds and the suspension of operations in Russia. Payment volume grew 16% in local currency (excluding Russia and China) with notable strength in cross-border volumes driven by rebounding international travel. Management also provided encouraging guidance for the next fiscal year. We continue to own the stock due to Visa’s long runway for growth and significant competitive advantages.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also take a look at 12 Best Insurance Dividend Stocks To Buy Now and 15 High Growth Large Cap Stocks to Invest In.