- The S&P 500 Financials index has shown a steady increase since March 2020 and has almost doubled since then.
- The financial sector companies include banks, insurance companies, brokerage firms as well as risk and asset management firms.
- Three financial stocks that have gained momentum over the past one month include: SVB Financial Group, Discover Financial Services and Willis Towers Watson Public Ltd.
The S&P 500 Financials index consists of over 40 financial sector companies including banks, investment firms as well as asset management firms. While the banking sector forms a major part of the financial sphere, there are other firms too that are on the rise like the BNPL sector.
The SPF index has slowly and steadily regained momentum and has almost doubled since its March dip.
The following S&P 500 Financial stocks have shown significant improvement over the past month and deserve your attention:
SVB Financial Group (NASDAQ: SIVB)
SVB Financial is the holding company for Silicon Valley Financial Bank, a commercial bank that serves emerging growth and middle-market growth companies functioning in targeted niches like technology and life sciences.
The company’s share price has almost doubled within a matter of only 4 months. The company’s shares traded at USD273.39 per share as of October 15th, 2020. However, the current price of the stock is USD506.50 per share. SVB’s rally continues as it rose 1.22% on Friday as well, showing better performance than its competitors.
As of the September 2020 quarter, the SVB group recorded net sales worth USD446 million. This was twice the net sales value recorded over the previous June quarter worth USD233 million. For the December quarter, the group reported earnings per share of USD7.40, a return on equity of 15.4% and a net margin of 28.6%.
The president and CEO of SVB sold 4,570 shares of the company on the 5th of February at an average price of USD488.97 per share. The total sale amounted to USD2.2 million. SVB group offers a diverse set of banking and financial products and services like asset management, private wealth management, investment services, etc. This diverse set-up enables the company to maintain a strong hold on the market.
Discover Financial Services (NYSE: DFS)
Discover Financial Services is a digital banking and payment services company and has gained popularity as one of the largest card issuers in the US. The firm also offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit.
The company reported its quarterly earnings for Q4 of 2020, with a net income of USD799 million. The bank’s direct banking pretax income surged to USD991 million, which is USD108 million higher than that of the previous corresponding period.
This increase was facilitated by a decline in the provision for credit losses partially offset by lesser revenue net of interest expenses and greater operating expenses. EVP, Chief Risk Officer of Discover, Brian Hughes recently sold 10,000 shares of the company at an average share price of USD 93.91 per share. The total sale amounted to USD939,100.
Willis Towers Watson Public Limited (NASDAQ: WLTW)
Willis Towers Watson is a multinational risk management, advisory and insurance brokerage company. In a recent business update, Willis Towers reported a revenue generation of USD2.7 billion during the fourth quarter 2020. This was up 2.8% as compared to the same quarter previous year.
The company’s adjusted EBITDA during the quarter was USD967 million, up by 4% over same quarter previous year. However, with increased earnings came a rise in costs too. Total cost of providing service increased by 8.7% y-o-y to reach USD2.2 billion owing to higher salaries and benefits, operating expenses, depreciation, etc.
In late January, the financial firm along with Aon announced a move towards a combined leadership for both companies. This would be effective once the proposed combination of both firms takes place.