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:
He likes the payment companies. He owns MA, but likes Visa just the same. Rough the past little while, due to fewer cross-border transactions and travel. These names will continue to move higher. Long-term chart is very strong. Digital only recently surpassed cash, so still lots of growth. Payment companies have more upside, as they'll…
Citi Group (C-N)
Not much growth in revenue or other important measures (cash flow). Current valuation cheap, however, not a consistent return on equity. Doesn't follow banking sector.
Morgan Stanley (MS-N)
He didn't care for the company before, but now it has $5 trillion in customer assets under its roof. It's a great franchise. The CEO has transformed MS.
Toronto Dominion (TD-T)
Both are good banks and look fine. The dividend will probably increase. As with other banks they are good for buying in the short and mid term but there will be competition in the long term. He owns TD but BMO.
Compared to similar company like Mastercard, metrics (return on equity, cash flow etc.) are not as competitive. Worry about strength of competitive moat. Risk that credit card product will be replaced by new technology. However, Visa is a good alternative to Mastercard.
Bank of Nova Scotia (BNS-T)
Canadian Banks are solid and are holding above the moving average. BNS and other banks are good for the short and mid term. Some concern for the long term with Fintechs coming in and nibbling around the edges of the banks.
Intact Financial (IFC-T)
(A Top Pick Jan 29/21, Up 19%) Beat last quarter by 64%. Bought RSA, with an 8% accretion rate. Trading around 14.3x. Still a very good, long-term story. A lot of catastrophe losses, but they've managed that part of the business well.
Royal Bank (RY-T)
If inflation and rising interest rates leads to a steeper environment, then yes, it will be positive. If Feds make a policy mistake and the yield curve flattens, it will be negative. The steeper the yield curve, the more profitable it is for banks. In the back half of next year, there is a risk…
Canadian Imperial Bank of Commerce(CM-T)
(A Top Pick Dec 29/20, Up 40%) Company didn't take write down set aside for pandemic. Room for divided growth and potential for share buybacks. Valuation cheaper than other Canadian big banks. Very resilient and should be part of most portfolio.
Bank of America (BAC-N)
It's a huge asset gatherer and enjoys customer loyalty, due to excellent digital interface. If the Fed hikes 4x this year, BAC will generate $6.5 billion in new revenue. 2022 could be BAC's year.