Money is a key pillar of the economy, and many companies have positioned themselves to profit from the strong demand for capital. Consumers spend, save and invest money. And people often need to borrow money to purchase goods and services.

Fintech stocks allow investors to accumulate wealth from these trends. Some companies offer innovative solutions for people who need access to money and want to reach their financial goals sooner. But it’s not just consumers. Additionally, small businesses are partnering with fintech companies to access more capital and reach additional customers.

The fintech sector is vast and full of promising potential. Let’s look at some of the top fintech stocks to consider.

Nu Holdings (NU)

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Nu Holdings (NYSE:NU) has outpaced the stock market by 44% year to date (Current year) I earn. The Brazilian digital bank is gaining market share in Latin America and has become the region’s leading digital bank.

The company ended the fourth quarter of 2023 with 93.9 million customers. That’s 26% on an annual basis (YOY) improvement. Nu Holdings has had no trouble generating more revenue from its growing customer base. Revenue increased 66% year over year, but profit growth was even better. Net income increased from $58.0 million in the fourth quarter of 2022 to $360.9 million in the fourth quarter of 2023. That’s a 522% year-over-year increase!

Additionally, Nu Holdings is growing rapidly across multiple verticals. Customers are making more deposits, investing their money, taking out personal loans and spending with their credit cards. The fintech company is well diversified and has healthy profit margins. Additionally, it has lower overheads than traditional banks, which translates into higher earnings. NU has been on a good ride for shareholders over the last year.

American Express (AXP)

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American Express (NYSE:AXP) is trading at a reasonable P/E ratio of 19. The credit and debit card issuer is expanding its profit margins and has an ambitious multi-year growth plan. Leadership believes it can achieve 9% to 11% year-over-year revenue growth and mid-teen EPS growth beyond 2026.

Furthermore, the fintech firm it provided a healthy resultThe numbers in the first quarter of 2024 suggest that it will be able to maintain these high standards. Revenue remained consistent and grew 11% year over year. Additionally, net income growth was $2.4 billion, an improvement of 34% year over year.

Additionally, American Express excites investors with its appeal among Millennials and Generation Z consumers. More than 60% of accounts opened in the first quarter of 2024 came from this group. The company offers a dividend yield of 1.21%. The company increased its dividend by one annualized 10.51% in the last decade. Finally, American Express has increased its dividend by 17% this year, making it an attractive dividend growth stock.

Sofi (SOFI)

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SoFi (NASDAQ:SOFI) is another digital bank that is gaining traction. The company saves on overheads since it does not need physical branches and this translates into better rates and conditions for its customers.

The stock has been on a roller coaster ride for several years, but the company has posted attractive financial results. In the first quarter of 2024, SOFi reported net revenues of $645 million and GAAP net earnings of $88 million. The company’s profit margin reached 13.6%, representing a significant improvement. Additionally, the first quarter was SOFI’s second consecutive quarter of GAAP profitability.

Additionally, Sofi raised its guidance for FY24 and revenues increased 37% year over year. SOFI added 622,000 members and ended the quarter with more than 8.1 million members. Subscriptions grew 44% year over year. The company is diversifying away from the lending segment, which is down 2% year-over-year.

Therefore, SOFI is gaining mainstream attention. And the official bank of the National Basketball Association (NBA) Sp such designation will result in additional exposure. Currently, the stock has a market capitalization of $7.3 billion and great potential. GAAP profitability makes it more attractive.

Fiserv (FI)

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Fiserv (NYSE:FI) is a financial services company that connects businesses and financial institutions. Businesses use the enterprise platform to accept payments, track performance and increase sales. Once businesses use Fiserv to manage their finances, it is difficult to switch platforms due to the time involved and other factors.

Over 70% of the world’s leading brands use Fiserv, and the company’s large customer base has translated into solid returns for investors. The stock is up 12% year to date and is up 75% over the past five years. Currently, the $87 billion company has a P/E ratio of 28.

The fintech company grew its GAAP revenue by 7% year-over-year First quarter 2024. GAAP EPS growth was even better and was 39% higher than the same period last year. Fiserv confirmed guidance indicating organic revenue growth of 15% to 17% year-over-year for full-year 2024. Analysts are optimistic about the stock and they believe it can gain 15% from current levels.

Robinhood (HOOD)

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Robinhood’s (NASDAQ:HOOD) fame comes from its brokerage platform. It was one of the first brokerage firms to introduce zero commissions on stock transactions and was also a pioneer in the cryptocurrency industry. Robinhood was one of the first brokerage firms to allow cryptocurrency trading, while other firms are catching up.

The company’s foray into innovative financial products and services can create more opportunities. Investors are monitoring the company’s situation credit card with unlimited 3% cash back. available to Robinhood Gold members. Furthermore, the fintech company has an impressive 3% match for IRA contributions.

Very few financial institutions and fintech companies have these types of offerings. Most companies don’t match any of your IRA contributions. Robinhood can gain more ground by releasing innovative products, and its trading platform continues to perform well. While the fintech company is down 49% since its IPO, the stock is up 45% year to date. As such, investors are starting to realize Robinhood’s potential, and the recent move to profitability has helped matters.

PayPal (PYPL)

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PayPal (NASDAQ:PYPL) The stock has been decimated in recent years, but it suddenly looks like an attractive value stock. Shares are down 41% over the past five years, but have rallied 7% year to date. The stock trades at a P/E ratio of 16.5 and offers double-digit profit margins.

Revenue increased 9% year over year in the first quarter of 2024, while GAAP EPS increased 18% year-over-year. However, growth is expected to slow in the coming quarters. That’s why the P/E ratio is appropriately much lower than it was a few years ago.

PayPal expects revenue growth to be between 6.5% and 7% year over year in the second quarter of 2024. Additionally, it expects a slight decline in GAAP EPS for fiscal 2024. PayPal believes this metric will fall from $3.84 per share a year earlier to approximately $3.65 per share. . The company cited one-time positive impacts on 2023 EPS from the sale of Happy Returns and the successes of PayPal’s strategic investment portfolio.

These benefactors contributed $0.38 per share in 2023. Removing these benefits translates to only $3.46 in EPS in 2023. This reduced EPS indicates a year-over-year growth rate of 5.5% for the ‘EPS in 2024. It’s still a low growth rate, but PayPal trades at a decent valuation and is the preferred payment method for more than 400 million users.

Bank of America (BAC)

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Bank of America (NYSE:BAC) is a well-managed financial institution that offers a respectable yield of 2.58% and trades at a P/E ratio of 13. The stock has gained 10% year to date and is up 34% over the past year.

A favorite of Warren Buffett, it still offers impressive profit margins. BAC generated $6.7 billion in net income and $25.8 billion in revenue. Both figures were down slightly year over year, but resulted in a net profit margin of 27.2%.

Additionally, Bank of America has weathered many economic cycles since its founding, including the Great Depression. The bank dates back to 1904 when it was called Bank of Italy. Investing in durable companies can lead to consistent returns and high cash flow.

The financial institution concluded its 21st consecutive quarter of account growth. It added approximately 245,000 new consumer checking accounts, bringing total consumer checking accounts to 36.9 million. Small business checking accounts grew 2% year over year to reach 3.9 million. Asset management and investment revenues increased 5% year-over-year to $5.6 billion.

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.

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