Financial providers use their expertise in capital allocation and risk assessment to help facilitate economic growth while offering consumers and businesses essential financial services. Still, investors are uneasy as companies face challenges from an unpredictable interest rate and inflation environment. These doubts have certainly contributed to the indutry's recent underperformance - over the past six months, its 6.1% gain has fallen behind the S&P 500's 11.7% rise.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here are three financials stocks we think can generate sustainable market-beating returns.
PayPal (PYPL)
Market Cap: $55.64 billion
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ:PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
Why Could PYPL Be a Winner?
- Share buybacks propelled its annual earnings per share growth to 19.4%, which outperformed its revenue gains over the last two years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $59.42 per share, PayPal trades at 10.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
SEI Investments (SEIC)
Market Cap: $10.36 billion
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ:SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
Why Is SEIC a Top Pick?
- Annual revenue growth of 9% over the last two years was above the sector average and underscores its products and services value to customers
- Share repurchases over the last two years enabled its annual earnings per share growth of 26.9% to outpace its revenue gains
- Industry-leading 26.7% return on equity demonstrates management’s skill in finding high-return investments
SEI Investments is trading at $84.07 per share, or 15.6x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Mastercard (MA)
Market Cap: $519 billion
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE:MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Why Will MA Beat the Market?
- Annual revenue growth of 15.1% over the last five years was superb and indicates its market share increased during this cycle
- Share buybacks propelled its annual earnings per share growth to 19%, which outperformed its revenue gains over the last five years
- ROE punches in at 164%, illustrating management’s expertise in identifying profitable investments
Mastercard’s stock price of $574.34 implies a valuation ratio of 31.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.