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Top 10 Finance Stocks To Watch in 2021

Melisa R. H. Posted On January 7, 2021
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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
Mastercard Inc. (MA-N) — Stockchase

Allan Tong’s Discover Picks Mastercard stocks’ EPS of $9.61 has jumped 47% in the past year. It trades at 37.23x though the street’s forward PE is only 33.94x. (Visa’s PE is 40.4x). However, the ROE is 142% while Visa’s is barely 40%, and MA pays a safe dividend of nearly 2% at a payout ratio…

stockchase.com stockchase.com

Citi Group (C-N)
Citigroup Inc. (C-N) — Stockchase
Citigroup Inc. (C-N) — Stockchase

Stands out with its compelling valuation. Global, strategic money-centre bank at 55% of book value. Too cheap to ignore. Very strongly capitalized company. Recession concerns have held the banks back. May stall out in a recession, but significantly more upside than down from here. Yield is 4.05%. (Analysts’ price target is $65.02)

stockchase.com stockchase.com

Morgan Stanley (MS-N)
Morgan Stanley (MS-N) — Stockchase
Morgan Stanley (MS-N) — Stockchase

He keeps buying this as it goes down. It's a core holding of his. Today, they announced an 11% dividend boost and a $20 billion share buyback.

stockchase.com stockchase.com

Toronto Dominion (TD-T)
Toronto Dominion (TD-T) — Stockchase
Toronto Dominion (TD-T) — Stockchase

Core holding, though sometimes you want more or less exposure. In an economic slowdown, as he expects this year, you want to pare back. He owns RY, TD, BMO, and BAM.A. Each has unique aspects that make for good diversification within the sector. Pullbacks provide an opportune chance to buy, put them away, and collect…

stockchase.com stockchase.com

VISA (V-N)
Visa Inc. (V-N) — Stockchase
Visa Inc. (V-N) — Stockchase

Stockchase Research Editor: Michael O'Reilly Holding the largest market share of US consumer spending for transaction processing along with MA, we select V as a TOP PICK. Currently V is valued slightly better at 30x earnings and 11x book, compared to MA at 34x and 43x, respectively. The company has been increasing dividends for 14…

stockchase.com stockchase.com

Bank of Nova Scotia (BNS-T)
Bank of Nova Scotia (BNS-T) — Stockchase
Bank of Nova Scotia (BNS-T) — Stockchase

BNS vs. CIBC or both? If you bought and held Canadian banks in 1976, they would have outperformed the markets. Banks enjoy an oligopoly. CIBC has had everything go wrong in the last 20 years, but they have now regained credibility. CIBC is more exposed to Canada than its peers. BNS is a big player…

stockchase.com stockchase.com

Intact Financial (IFC-T)
Intact Financial (IFC-T) — Stockchase
Intact Financial (IFC-T) — Stockchase

It has performed very well in Canada. Continues to make acquisitions in North America and elsewhere. It is a good (necessary) business since people need to spend money on insurance. He would keep if owned but prefers one in the same field which will be one of his top picks.

stockchase.com stockchase.com

Royal Bank (RY-T)
Royal Bank (RY-T) — Stockchase
Royal Bank (RY-T) — Stockchase

Core holding, though sometimes you want more or less exposure. In an economic slowdown, as he expects this year, you want to pare back. He owns RY, TD, BMO, and BAM.A. Each has unique aspects that make for good diversification within the sector. Pullbacks provide an opportune chance to buy, put them away, and collect…

stockchase.com stockchase.com

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

BNS vs. CIBC or both? If you bought and held Canadian banks in 1976, they would have outperformed the markets. Banks enjoy an oligopoly. CIBC has had everything go wrong in the last 20 years, but they have now regained credibility. CIBC is more exposed to Canada than its peers. BNS is a big player…

stockchase.com stockchase.com

Bank of America (BAC-N)
Bank of America (BAC-N) — Stockchase
Bank of America (BAC-N) — Stockchase

(A Top Pick Jun 15/21, Down 11%) Market sentiment has built-in a fairly deep recession. As research comes in, the market will rethink this and banks will continue upward. Very sensitive to interest rates, so does very well with steeper yield curve. Loan growth good, consumer is healthy.

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