Banking & Finance

Both Hedge Fund and Mutual Fund Managers Love These Red-Hot Financials

Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. It operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.

Trading at a still very cheap 9.9 times estimated 2021 earnings, this stock looks very reasonable in what remains a volatile stock market and in a sector that has lagged dramatically.

Investors in Citigroup stock receive a 2.61% dividend. The Goldman Sachs price target is $88, while the consensus target is $84.84. The shares closed trading on Monday at $78.03 apiece.

Charles Schwab

The iconic discount broker, which is also a member of the Goldman Sachs Conviction List, changed everything across Wall Street in 2019 with the elimination of commissions for online trading. Charles Schwab Corp. (NYSE: SCHW) is a leading provider of brokerage, banking and investment-related services to consumers and businesses.

The company has two business segments. Investor Services provides retail brokerage, banking, advice and other financial services, while Institutional Services provides business-to-business services to independent investment advisers and company benefit plan sponsors.

The analysts at Goldman Sachs expect the key driver for the company to be positive estimate revisions as Wall Street updates forecasts for higher securities reinvestment yields, which along with an easing of premium amortization in the coming quarters could help to stabilize the net interest margin.

Investors receive a 1.00% dividend. The $76 Goldman Sachs price target is less than the $79.83 consensus target. Monday’s close for Charles Schwab stock was at $72.61 per share.

Mastercard

This continues to be one of the top credit card plays in the world, and it also resides on the Goldman Sachs Conviction List. Mastercard Inc. (NYSE: MA) is a global payments provider that operates one of the largest payment processing networks, connecting billions of consumers, millions of merchants, and thousands of financial institutions in more than 210 countries. Its brands include Mastercard, Maestro and Cirrus.

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