Fintech
If you can only buy one Fintech stock in May, it better be one of these 3 names
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Fintech companies make money more accessible and help people grow their wealth. These companies help people open bank accounts, brokerage accounts, and more. The continued demand for money suggests that the best fintech companies can remain relevant for many generations.
Some banks have been around for centuries, but investors can look to newer companies for higher total returns. So, let’s look at some tops fintech stocks to be considered that they have great potential.
SoFi (SOFI)
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SoFi (NASDAQ:SOFI) is a digital bank that offers competitive rates and conditions for its products. The company offers loans, bank accounts, wallets, credit cards and other financial products.
True, the stock has been a roller coaster for investors, but the long-term picture is starting to look bright. Revenue increased 37% year over year (YOY) In First quarter of 2024 as net income was $88.0 million. Additionally, the company reported a net loss of $34.4 million in the same period last year, marking a major turnaround in the company’s GAAP profitability.
Now, SoFi has more than 8 million members, with membership numbers increasing 44% year over year. The digital bank added nearly 2.5 million members from Q1 2023 to Q1 2024. Additionally, SoFi achieved sequential growth of 7.8%.
Currently, Wall Street has mixed headlines and has he rated it a catch. The average price target suggests an upside of 29% from the current price. The higher price target of $14 per share implies the price can more than double.
American Express (AXP)
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American Squeeze (NYSE:AXP) has been around much longer than SoFi. The credit and debit card issuer was founded in 1850. The company began as a shipping company and moved into financial and travel services in the early 1900s. The company’s first paper payment card was issued in 1958.
Furthermore, the fintech firm is a Warren Buffett’s top pick, and it’s easy to see why. The stock trades at a P/E ratio of 20 and recently posted 11% year-over-year revenue growth and 33% year-over-year net income growth in First quarter of 2024. Furthermore, a relatively low valuation combined with strong revenue and earnings growth paves the way for positive long-term returns.
Furthermore, American Express has done well to meet that expectation. The stock is up 26% year to date (Current year) and has more than doubled in the last five years. The majority of the company’s new account openings come from Millennial and Gen Z consumers. Thus, American Express continues to win across generations, and its 1.16% yield means investors are winning, too. The company has maintained a annualized dividend growth rate of 10.51% in the last decade.
Nu Holdings (NU)
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Nu Holdings (NYSE:NU) is a Brazilian digital bank that is thriving in Latin America. The bank offers checking and savings accounts, credit and debit cards, brokerage accounts, loans and other financial products. It’s an all-in-one resource for a rapidly growing customer base.
The bank reached 99.3 million customers in First quarter of 2024 that’s a 26% year-over-year improvement. Additionally, Nu Holdings reported 69% year-over-year revenue growth and 167% year-over-year net income growth in the same quarter. These growth rates helped the bank close the quarter with a net profit margin of 29.7%.
Nu Holdings is currently trading at a P/E ratio of 45 and is up 44% year to date. The growing digital bank has a market capitalization of $56 billion. Additionally, customers are becoming more active on the digital bank’s platform. The activity rate increased to a record high of 83.2% in the quarter. Analysts did rated the stock a Strong Buy and they predicted an increase of 13%.
As of the date of publication, Marc Guberti holds a long position in SOFI. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Guidelines for publication.
Marc Guberti is a freelance financial writer at InvestorPlace.com who hosts the Breakthrough Success podcast. He has contributed to several publications, including US News & World Report, Benzinga and Joy Wallet.