5 Best Fintech Stocks To Buy In 2024

In this article, we discuss 5 best fintech stocks to buy in 2024. If you want to read our detailed discussion on the fintech industry, head over to 10 Best Fintech Stocks To Buy in 2024. 

5. American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 74

American Express Company (NYSE:AXP) is a global provider of charge and credit payment card products and travel-related services. Operating through three segments – Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services – the company offers payment and financing products, network services, accounts payable expense management, and travel and lifestyle services.  It is one of the best fintech stocks to watch. 

On January 26, American Express Company (NYSE:AXP) released stronger-than-expected guidance for 2024. Despite missing the average analyst estimates for earnings per share and revenue in the last quarter of 2023, the company plans to increase its quarterly dividend by 17% to $0.70, starting with the Q1 dividend declaration. For 2024, American Express Company (NYSE:AXP) anticipates EPS in the range of $12.65 to $13.15, surpassing the consensus estimate of $12.30, with a revenue growth forecast of 9% to 11%. This guidance suggests 2024 revenue between $66.0 billion and $67.2 billion, compared to the consensus of $66.2 billion.

According to Insider Monkey’s third quarter database, 74 hedge funds were long American Express Company (NYSE:AXP), compared to 73 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 151.6 million shares worth $22.6 billion. 

In its fourth quarter 2023 investor letter, Oakmark Select Fund stated the following regarding American Express Company (NYSE:AXP):

“American Express Company (NYSE:AXP) is one of the largest credit card issuers and payment networks in the world. We believe the company’s closed-loop network, brand equity and scale represent durable competitive advantages. Unlike most card issuers that process credit card transactions over third-party networks, American Express processes transactions over its own network. This allows American Express to earn greater economics than peers on each card transaction. The company retains part of this advantage in the form of higher profitability and reinvests the rest in enhanced customer rewards and service. Over time, these investments have helped American Express build its brand and attract more lucrative, high-spending card customers. We expect this business model and customer-centric approach will continue to drive industry-leading growth for years to come. Concerns over the near-term economic outlook allowed us to purchase shares of American Express at a 13x P/E on next year’s consensus earnings estimate. We think that is an attractive valuation for a company with this combination of business quality and growth.”

4. MercadoLibre, Inc. (NASDAQ:MELI)

Number of Hedge Fund Holders: 76

MercadoLibre, Inc. (NASDAQ:MELI) operates online commerce platforms in Latin America. Its main platforms include Mercado Libre Marketplace, an automated online commerce platform for businesses and individuals, and Mercado Pago FinTech, a financial technology solution facilitating online transactions and payments. The company also offers services such as Mercado Fondo for investment, Mercado Credito for loans, and Mercado Envios for logistics solutions. MercadoLibre, Inc. (NASDAQ:MELI) is one of the best fintech stocks to monitor. 

On November 1, MercadoLibre, Inc. (NASDAQ:MELI) reported a Q3 GAAP EPS of $7.18 and a revenue of $3.8 billion, outperforming Wall Street estimates by $1.35 and $250 million, respectively. Revenue for the period increased 41.3% during the quarter. 

According to Insider Monkey’s third quarter database, 76 hedge funds were bullish on MercadoLibre, Inc. (NASDAQ:MELI), compared to 77 funds in the prior quarter. David Blood and Al Gore’s Generation Investment Management is the leading position holder in the company, with 480,480 shares worth over $609 million. 

Artisan Developing World Fund stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its fourth quarter 2023 investor letter:

“Top contributors to performance for the quarter included Latin American marketplace MercadoLibre, Inc. (NASDAQ:MELI). MercadoLibre benefited from share gains in e-commerce, resilient performance in fintech including increased credit card disbursements, and a positive presidential election outcome in Argentina.

Moreover, we have marginally reduced portfolio concentration over the course of the year. Essentially, 2022 was a moment of extremely low reinvestment risk that allowed us to deemphasize China and other holdings, while concentrating around a handful of financially and strategically sound investments such as Nvidia, MercadoLibre, Airbnb and CrowdStrike. With these investments having largely reflated, we have sought to redistribute some of this capital while retaining significant residual positions. It is our hope that these actions can enhance our ability to execute our investment program if, for example, market exuberance about monetary policy proves excessive.”

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

Number of Hedge Fund Holders: 78

PayPal Holdings, Inc. (NASDAQ:PYPL) operates a global technology platform facilitating digital payments for merchants and consumers. The company offers payment solutions under PayPal, Venmo, and Braintree names. PayPal Holdings, Inc. (NASDAQ:PYPL) is one of the top fintech stocks, ranking 3rd on our list. On February 7, the company reported a Q4 non-GAAP EPS of $1.48 and a revenue of $8 billion, outperforming Wall Street estimates by $0.12 and $130 million, respectively. 

According to Insider Monkey’s third quarter database, PayPal Holdings, Inc. (NASDAQ:PYPL) was part of 78 hedge fund portfolios, compared to 86 in the preceding quarter. Gavin Baker’s Atreides Management is a prominent stakeholder of the company, with 4.17 million shares worth $244 million. 

Wedgewood Partners stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its fourth quarter 2023 investor letter:

“PayPal Holdings, Inc. (NASDAQ:PYPL) also contributed less to portfolio performance than most holdings during the fourth quarter. The total payment volume handled by PayPal during its most recent quarter grew +15%, which helped drive healthy revenue growth and +20% earnings per share growth. Critically, the Company’s new management team has significant opportunity to drive more revenue and earnings growth across the massive, multi-trillion-dollar payments addressable market. PayPal’s rapidly growing payment processing brand, Braintree, represents one of those revenue growth opportunities, either by raising prices, as the Company had previously used a low-price strategy to establish a beachhead in this market, or by adding value-added services. PayPal’s branded checkout remains the largest volume and profit driver for the business, and we expect this to continue to track in-line with e-commerce growth in the near term, and eventually take share as the Company rolls out new features to its over +400 million users and +30 million merchants. We added to our position with the stock trading at just 10X forward earnings estimates during the quarter because there are many more long-term growth opportunities relative to most financial companies that trade for similar multiples and compared to technology companies that trade for much higher multiples.”

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 140

Mastercard Incorporated (NYSE:MA), a technology firm, offers transaction processing and payment-related products and services globally. The company processes payment transactions, handles authorization, clearing, and settlement processes, and provides additional payment-related products and services. It is one of the best fintech stocks to buy. On February 6, Mastercard Incorporated (NYSE:MA) declared a quarterly dividend of $0.66 per share, in line with previous. The dividend is payable on May 9, to shareholders of record on April 9. 

According to Insider Monkey’s third quarter database, 140 hedge funds were bullish on Mastercard Incorporated (NYSE:MA), compared to 139 funds in the prior quarter. Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with 5.85 million shares worth $2.3 billion. 

Ensemble Capital Management stated the following regarding Mastercard Incorporated (NYSE:MA) in its fourth quarter 2023 investor letter:

“Mastercard Incorporated (NYSE:MA) (7.21% weight in the Fund): Payment companies are data companies. As we discussed last quarter in our write up of Mastercard, merchants can generate significant value from analyzing payment data to better understand their customers. Mastercard has long built AI-based products to enhance payment security and provide merchants with rich data analytics. In December, they rolled out Muse, a new online shopping companion that merchants who utilize certain Mastercard services can install on their own websites.

Muse seeks to replicate the instore experience of working with a salesclerk by allowing the customer to use natural language to browse products. Online shopping already works well if you know exactly what you are looking for, but Muse is striving to help customers find things to buy even when they aren’t sure what they are looking for.

Mastercard (7.21% weight in the Fund): In late October, Mastercard reported earnings that investors interpreted as pointing to a near term slowdown in payment growth. The stock fell 5.6% on the day. By the end of the next week, the stock had recovered its losses and went on to reach a new all time high on the last day of the year. But the 7.9% gain on the quarter slightly trailed the S&P 500.”

1. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 167

Visa Inc. (NYSE:V) is a payment technology company operating globally, with a focus on transaction processing through its VisaNet network. Visa Inc. (NYSE:V) ranks 1st on our list of the best fintech stocks for 2024. On January 25, the company reported a FQ1 non-GAAP EPS of $2.41 and a revenue of $8.6 billion, outperforming Wall Street estimates by $0.07 and $50 million, respectively. Visa will also pay a $0.52 per share quarterly dividend to shareholders on March 1, to shareholders of record on February 9. 

According to Insider Monkey’s third quarter database, 167 hedge funds were bullish on Visa Inc. (NYSE:V), compared to 171 funds in the preceding quarter. Chris Hohn’s TCI Fund Management is the biggest stakeholder of the company, with 16.8 million shares worth $3.8 billion. 

In its October 2023 investor letter, Lakehouse Capital stated the following regarding Visa Inc. (NYSE:V):

“Visa Inc. (NYSE:V) reported a strong result with net revenue increasing 11% year-on-year to $8.6 billion and non-GAAP earnings per share increasing by 21% to $2.33. As has been the case for many years now, the scalable nature of the business allows for revenue growth to outpace its costs, which places the company in a good position to navigate through this inflationary period. The network continues to grow, with credentials and merchant locations up 7% and 17%, respectively. Cross-border travel-related spend also maintained its robust growth, increasing 26% year-on-year while Visa Direct reported 7.5 billion transactions, up 19% year-on-year, progressing on penetrating categories such as cross-border remittances. Altogether, we’re pleased with how the business is tracking and remain positive on Visa’s outlook.”

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