Top 10 Finance Stocks To Watch in 2021
2020 saw a year of uncertainty and financial hardship for many households across the globe. It looks to be that the worst fears were avoided and banks are seeing a modest recovery. Low interest rates remain and overhang for the banking sector however. According to experts, the balance sheets and liquidity of financial companies are generally strong and 2021 should see better results.
The coronavirus also accelerated already established trends of moving away from physical cash to contactless and online payment methods. This trend is expected to continue to gain steam into 2021.
Here are the top 10 Finance stocks to watch in 2021:
It traditionally trades at high value but grows in the double digit range on both top and bottom lines. It is a basically a duopoly with Visa.
Citi Group (C-N)
Banks reported their Q2 today, but the market reaction to Citi has been weak, a reaction to the consumer's large credit card balances and trading revenue down 13%.
Morgan Stanley (MS-N)
Well respected, well run. Refocused on expanding wealth management, and this has done well, making the business more stable. Nothing wrong with it. She owns the well run, diversified JPM instead.
Toronto Dominion (TD-T)
Impact of a housing bubble? Same comments as with Royal Bank. Both enjoy a regulated oligopoly. TD is well exposed to the US and enjoys a healthy wealth management business. TD is heavily capitalized, more than RY, because they couldn't buy First Horizon last spring. They can raise dividends, buyback shares and/or buy companies. Trades…
Owns shares of company. Very strong company with lots of room to run. Excellent brand name with very strong technology. Has owned shares before and has since re-purchased when the shares fell. Compares very well with Mastercard in terms of valuation and technology.
Bank of Nova Scotia (BNS-T)
Reported today and the street was disappointed by their earnings, because BNS had bigger than expected loan-loss provisions. We're entering a credit cycle that will last up to 6 quarters where lending will slow down. BNS is the only bank he owns. The CEO has been cutting costs and he's confident in him. If you…
Intact Financial (IFC-T)
Well-run and enjoys impressive growth through acquisitions. Has pricing power. He expects more growth and market share. High profitability, but trades at a higher-than-market 17x PE. You can buy a position here.
Royal Bank (RY-T)
The support level is at $119 which would be a good buying opportunity. It should get back to the mid $120's by the end of the year. Set your stop loss at $113. CIBC and TD are his big bank holdings. Prices will be affected by positive inflation and interest rate news.
Canadian Imperial Bank of Commerce(CM-T)
All banks are down 25-30%. CIBC is most exposed to housing mortgages. Banks pay a high yield, 7.1% by CIBC, which is huge for banks. Worries are a recession or housing weakness. But the Canadian banks enjoy an oligopoly. Canadian banks are okay short-term as they enter seasonality now.
Bank of America (BAC-N)
Focused on retail banking, which is the most conservative. Good source of deposit funding. Bonds on balance sheet impair capital, but this is short term and doesn't imperil fundamental operations. Positive. CEO is solid.