Financial firms serve as the backbone of the economy, providing essential services from lending and investment management to risk management and payment processing. But uncertainty about fiscal and monetary policy has tempered enthusiasm, limiting the industry's gains to 8.7% over the past six months. This return lagged the S&P 500's 13.3% climb.
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. With that said, here is one financials stock boasting a durable advantage and two we’re passing on.
Two Financials Stocks to Sell:
State Street (STT)
Market Cap: $36.93 billion
Dating back to 1792 when Boston's Long Wharf was the center of global shipping and trade, State Street (NYSE:STT) provides custody, investment management, and other financial services to institutional investors like pension funds, asset managers, and central banks worldwide.
Why Are We Hesitant About STT?
- Sizable revenue base leads to growth challenges as its 3.1% annual revenue increases over the last five years fell short of other financials companies
- Earnings per share lagged its peers over the last five years as they only grew by 7.3% annually
State Street’s stock price of $131.65 implies a valuation ratio of 11.8x forward P/E. Read our free research report to see why you should think twice about including STT in your portfolio.
OneMain (OMF)
Market Cap: $8.12 billion
Dating back to 1912 and formerly known as Springleaf, OneMain Holdings (NYSE:OMF) provides personal loans, auto financing, and credit cards to nonprime consumers who have limited access to traditional banking services.
Why Is OMF Not Exciting?
- 4.3% annual revenue growth over the last five years was slower than its financials peers
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 3.4% annually
- High debt-to-equity ratio of 6.6× shows the firm carries too much debt relative to shareholder equity, increasing bankruptcy risk
At $68.88 per share, OneMain trades at 9.1x forward P/E. To fully understand why you should be careful with OMF, check out our full research report (it’s free for active Edge members).
One Financials Stock to Buy:
Blackstone (BX)
Market Cap: $121.8 billion
With over $1 trillion in assets under management and investments spanning real estate, private equity, credit, and hedge funds, Blackstone (NYSE:BX) is a global alternative asset manager that invests capital on behalf of pension funds, sovereign wealth funds, and other institutional investors.
Why Is BX a Good Business?
- Annual revenue growth of 19.2% over the last five years was superb and indicates its market share increased during this cycle
- Fee-related earnings improved by 22.7% annually over the last five years as it eliminated redundant costs
- Earnings per share grew by 19.7% annually over the last five years and easily exceeded the peer group average
Blackstone is trading at $155.91 per share, or 25.2x 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.
Stocks We Like Even More
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 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% 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.