Financial institutions play a critical role, offering everything from consumer banking to wealth management and specialized financial solutions. But worries about economic uncertainty and potential market volatility have kept sentiment in check, and over the past six months, the industry's 1.9% return has trailed the S&P 500 by 2.9 percentage points.
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. Keeping that in mind, here are two financials stocks we think can generate sustainable market-beating returns and one we’re passing on.
One Financials Stock to Sell:
HA Sustainable Infrastructure Capital (HASI)
Market Cap: $5.24 billion
With a proprietary "CarbonCount" metric that quantifies the environmental impact of each dollar invested, HA Sustainable Infrastructure Capital (NYSE: HASI) is an investment firm that finances and develops climate-positive infrastructure projects across renewable energy, energy efficiency, and ecological restoration.
Why Do We Think Twice About HASI?
- Low return on equity reflects management’s struggle to allocate funds effectively
- 27× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $41.02 per share, HA Sustainable Infrastructure Capital trades at 13.7x forward P/E. Read our free research report to see why you should think twice about including HASI in your portfolio.
Two Financials Stocks to Buy:
Houlihan Lokey (HLI)
Market Cap: $11.21 billion
Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.
Why Is HLI a Top Pick?
- Impressive 20% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 34.9% over the last two years outstripped its revenue performance
- Annual tangible book value per share growth of 34.3% over the past two years was outstanding, reflecting strong capital accumulation this cycle
Houlihan Lokey is trading at $160.64 per share, or 20.2x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Paymentus (PAY)
Market Cap: $3.64 billion
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Why Will PAY Beat the Market?
- Annual revenue growth of 39.5% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 65.8% annually, topping its revenue gains
Paymentus’s stock price of $28.99 implies a valuation ratio of 36.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
