Top 10 Finance Stocks To Watch in 2021

Melisa R. H. Posted On January 7, 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:

Mastercard (MA-N)

Mastercard Inc. (MA-N) — Stockchase

Same tailwind as Visa: spending is up. Likes it.

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Citi Group (C-N)

Citigroup Inc. (C-N) — Stockchase

Unfocused, a cleanup operation. Trades cheaply, but deservedly, as it's half as profitable as other big money-centre banks. Chart's not good, tracking the market down. Better ideas elsewhere.

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Morgan Stanley (MS-N)

Morgan Stanley (MS-N) — Stockchase

Though he's bearish long term, an investor can nibble away here. Small caps are a good place to be, because of less exposure to the strong US dollar. Also, supply chain woes are easing. So, he has been adding to Goldman Sachs, Bank of American and Morgan Stanley. The market can move higher (short term).…

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Toronto Dominion (TD-T)

Toronto Dominion (TD-T) — Stockchase

TD vs. CM for the long term? TD. CM has a lower valuation, but TD has everything going for it. CM is struggling, and he's wary of that. Go with the better quality ones now. His firm looks at valuation, not fundamentals. When it's time to buy value, he'd look at CM.

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VISA (V-N)

Visa Inc. (V-N) — Stockchase

Leader in digital payments. New share buyback program, increased dividend by 20%. Will benefit from pent-up travel demand surge. US consumer continues to be strong. Retail sales recently marched to a new high. Very good cashflow, no material debt. Predictable sales and earnings growth. Secular trend away from cash. Yield is 0.85%. (Analysts’ price target…

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Bank of Nova Scotia (BNS-T)

Bank of Nova Scotia (BNS-T) — Stockchase

Stockchase Research Editor: Michael O'Reilly Trading at only 9x earnings and under 1.25x book value, BNS is reiterated as a TOP PICK. Market analysts have already factored in a reduction in quarterly earnings, leaving more likelihood for a positive earnings surprise later this month -- especially as higher interest rate allow for higher profit margin…

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Intact Financial (IFC-T)

Intact Financial (IFC-T) — Stockchase

(A Top Pick Nov 03/21, Up 22%) Still buying. Reported yesterday, close to what the street was looking for. Great company. Insured loss costs went down during Covid. Pricing power. Best-in-class P&C insurer. A buy and hold "trophy".

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Royal Bank (RY-T)

Royal Bank (RY-T) — Stockchase

Consistent performance, US exposure, fewer leadership risks. He'd choose this over BNS or CM.

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Canadian Imperial Bank of Commerce(CM-T)

Canadian Imperial Bank of Commerce (CM-T) — Stockchase

Big mortgage loan book in Canada. Question marks around how Canadians are going to be able to handle higher interest rates. Domestic focus could keep a lid on multiple expansion.

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Bank of America (BAC-N)

Bank of America (BAC-N) — Stockchase

Continues to reduce costs and head counts mainly by using technology, important for banks. Great capital base. Trades at 1.2x book. With its large retail franchise, increasing rates are good for it. Next year, should do well in all its segments, so buy now. Excess capital. Over-reserves will be rolled into earnings next year. CEO's…

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