Financial firms serve as the backbone of the economy, providing essential services from lending and investment management to risk management and payment processing. These companies have benefited from improving market activity and economic fundamentals, so it’s no surprise the industry has posted a 13% gain over the past six months, nearly mirroring the S&P 500.
Nevertheless, investors should tread carefully as many firms are cyclical due to their leverage and exposure to regulatory changes. On that note, here are two resilient financials stocks at the top of our wish list and one best left ignored.
One Financials Stock to Sell:
PayPal (PYPL)
Market Cap: $50.64 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 Do We Avoid PYPL?
- The company has faced growth challenges as its 4.9% annual revenue increases over the last two years fell short of other financials companies
- Performance over the past two years shows its incremental sales were less profitable, as its 2.3% annual earnings per share growth trailed its revenue gains
At $59.07 per share, PayPal trades at 10.6x forward P/E. If you’re considering PYPL for your portfolio, see our FREE research report to learn more.
Two Financials Stocks to Watch:
StepStone Group (STEP)
Market Cap: $3.96 billion
Operating as both an advisor and asset manager with over $100 billion in assets under management, StepStone Group (NASDAQ: STEP) is an investment firm that provides clients with access to private market investments across private equity, real estate, private debt, and infrastructure.
Why Do We Watch STEP?
- Market share has increased this cycle as its 37.3% annual revenue growth over the last two years was exceptional
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 24.7% annually
StepStone Group’s stock price of $48.09 implies a valuation ratio of 18.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Berkshire Hathaway (BRK.A)
Market Cap: $1.09 trillion
Led by legendary investor Warren Buffett since 1965, transforming it from a struggling textile manufacturer into a corporate giant, Berkshire Hathaway (NYSE: BRK.A) is a diversified holding company that owns businesses across insurance, railroads, utilities, manufacturing, retail, and services sectors.
Why Is BRK.A Interesting?
- Earnings per share grew by 18.9% annually over the last two years, comfortably beating the peer group average
- Annual tangible book value per share growth of 15.9% over the last five years was superb and indicates its capital strength increased during this cycle
- ROE punches in at 13.2%, illustrating management’s expertise in identifying profitable investments
Berkshire Hathaway is trading at $764,021 per share, or 23.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
