The global financial services market is valued at upwards of $20 trillion. Of course, with such a lofty market valuation there is an abundance of opportunity for investors.
Financial industries offer essential services such as consumer banking, mortgage and personal loans, along with insurance. For investors there are a variety of diverse financial stocks to choose from.
Narrowing down the vast amount of options, several Zacks Finance sector stocks are standing out at the moment. Here are three highly-ranked finance stocks to consider that all covet a Zacks Rank #1 (Strong Buy).
Ageas AGESY
Formally known as Fortis, Ageas offers international insurance services including life and non-life, disability, and medical to individuals and groups.
With an extensive reach in Europe and Asia, Ageas’ bottom line expansion is intriguing. Fiscal 2023 earnings are anticipated to leap 25% to $7.23 per share compared to EPS of $5.77 a year ago. Plus, FY24 earnings are forecasted to rise another 10% to $7.97 per share.
Most compelling is that Ageas stock trades at $42 and just 5.9X forward earnings. This is nicely beneath the Zacks Insurance-Multi line industry average of 9.5X and a steep discount to the S&P 500’s 21X.
Ageas stock is down -4% this year and is making a strong case for being undervalued at the moment. Furthermore, Ageas offers a generous 2.64% annual dividend yield to reward patient investors which is on par with its industry average and tops the benchmark’s 1.42% average.
Midwest Holding MDWT
Midwest Holding’s stock is attractive and the company has a somewhat unique niche in the broader financial sector.
Expansive top and bottom line growth is expected with Midwest Holding providing technology-enabled and services-oriented solutions to distributors and reinsurers of annuity and life insurance products in the United States.
Total sales are projected at $93 million in FY23, climbing 73% from $53.71 million last year. Fiscal 2024 sales are expected to be virtual flat. More impressive, earnings are forecasted to skyrocket 666% this year at $3.85 per share compared to an adjusted loss of -$0.69 a share in 2022. Fiscal 2024 earnings are expected to dip -19% to $3.10 a share but remain well above the probability line with Midwest Holding being publicy traded since December 2020.
Plus, annual earnings estimates are nicely up over the last 30 days and Midwest Holding’s stock trades at $26 and 6.8X forward earnings. This is a 47% discount to the Zacks Financial-Miscellaneous Services industry average of 13X and well below the benchmark.
Furthermore, Midwest Holding’s Stock has soared +107% in 2023 but still trades 63% below its IPO price of around $70 per share and may still be at an attractive entry point.
Mr. Cooper Group COOP
Among the consumer loans space, Mr. Cooper Group is carving out its own niche providing quality servicing, origination and transaction-based services to single-family residences in the U.S.
Expansive bottom line growth and the trend of earnings estimate revisions is very compelling over the last two months with FY23 earnings now anticipated at $6.28 per share versus EPS of $2.30 last year. Fiscal 2024 earnings are forecasted to jump another 29% to $8.12 a share.
Shares of COOP have soared +35% YTD and still trade reasonably at $54 and 8.6X forward earnings. To that point, COOP shares trade near the Zacks Financial-Consumer Loans industry average of 6.8X with soaring earrings estimates serving as a strong catalyst for more short-term upside.
Takeaway
Considering their expansive growth potential, these finance stocks are shaping up to be exciting investments at their current levels. Ageas, Midwest Holding, and Mr. Cooper Group certainly have potential to take market share in the $20 trillion global financial services space and now looks like a great time to buy their stocks.
Ageas SA (AGESY): Free Stock Analysis Report
MR. COOPER GROUP INC (COOP): Free Stock Analysis Report
Midwest Holding Inc. (MDWT): Free Stock Analysis Report
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