Five financial stocks that may benefit from Fed's tapering plan

Highlights

  • The Goldman Sachs Group, Inc. (NYSE: GS) stock increased by 47.87% YTD.
  • Wells Fargo & Company’s (NYSE: WFC) total revenue was US$20.27 billion in Q2, FY21.
  • JPMorgan Chase & Co. (NYSE: JPM) reported revenue of US$30.5 billion in Q2, FY21.

Many investors are closely watching the financial stocks as the Federal Reserve contemplates stimulus tapering later this year. At its two-day meeting ended on Sep 22, the Fed signaled that it might start withdrawing its asset-buying program as early as November.

Stocks have been volatile in September after various global and domestic developments. Besides the Fed's tapering news, Hurricane Ida disruptions, lingering global supply chain dilemmas, and geopolitical developments may have contributed to their subdued performance.

Here we explore the top five financial stocks that gave more than 28% return YTD.

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Goldman Sachs Group, Inc. (NYSE: GS)

Goldman Sachs is a New York-based investment banking and financial services company with global operations. The GS stock was trading 0.26% down to US$390.85 on Sep 24. However, its YTD return is 47.87%.

Goldman Sachs has a market cap of US$131.75 billion. Its P/E ratio is 7.06, and the forward P/E one year is 7.30. In addition, its EPS is US$55.38.

Goldman Sachs 52-week highest and lowest stock prices were US$420.76 and US$185.52, respectively. The trading volume on September 24 was 1,789,664.

The bank’s total investment income was US$83.91 million in Q2, FY21, against an income of US$30.62 million in Q2, FY20. Its net investment income after taxes was US$58.17 million, compared to US$18.18 million in Q2, FY20.

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Wells Fargo & Company (NYSE: WFC)

Wells Fargo is a San Francisco, California-based financial company that provides various services like banking, mortgage, investment, etc.

The stock was marginally up by 0.25 to US$47.92 on September 24, while it rose 60.94% YTD.

This leading American financial company’s market cap is US$196.77 billion, while the P/E ratio and the forward P/E one-year ratio are 13.73 and 10.77, respectively. The EPS is US$3.49.

Wells Fargo’s 52-week highest and lowest stock prices were US$51.41 and US$20.76, respectively. On Sep 24, its trading volume was 20,384,670.

The company’s total revenue rose from US$18.28 billion in Q2 FY20, to US$20.27 billion in Q2 FY21. It logged a net income of US$6.04 billion against a loss of US$3.84 billion in Q2, FY20.

Top financial stocks top keep an eye on post stimulus tapering.

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Bank of America Corporation (NYSE: BAC)


The Bank of America is a Charlotte, North Carolina-based investment bank and financial services company. The stock rose 1.08% to US$42.14 on Sep 24, while it jumped 38.83% YTD.

The Bank of America’s market cap is US$363.55 billion. The P/E ratio and the forward P/E one-year ratio are 14.09 and 12.02, respectively. In addition, the EPS is US$2.99.

The BAC stock recorded a 52-week high and low of US$43.49 and US$22.95, respectively. On September 24, its trading volume was 39,042,260.

Bank of America’s total revenue, net of interest expense of the bank was US$21.5 billion in Q2, FY21, against US$22.3 billion in Q2, FY20. In addition, its net income was US$9.2 billion, or US$1.03 per diluted share, against US$3.5 billion, or US$0.37 per diluted share, in Q2, FY20.

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JPMorgan Chase & Co. (NYSE: JPM)


JPMorgan Chase & Co. is an investment bank and financial services company based in New York. JPMorgan’s clients include corporates, government bodies, etc.

The stock closed at 1.15% up to US$163.04 on Sep 24, while it rose 28.05% YTD.

JPMorgan Chase’s market cap is US$487.18 billion, while the P/E ratio and the forward P/E one-year ratio are 10.88 and 11.10, respectively. In addition, its EPS is US$14.99.

The JPMorgan stock recorded a 52-week high and low of US$167.44 and US$91.38, respectively, while its trading volume on Sep 24 was 10,102,430.

The company’s net revenue declined from US$33.1 billion in Q2, FY20, to US$30.5 billion in Q2 FY21. Its net income was US$11.94 billion against a net income of US$4.68 billion in Q2, FY20.

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Morgan Stanley (NYSE: MS)


The New York-based Morgan Stanley is an investment banking and financial services company and has clients across the globe, including government agencies. The stock was trading at 0.62% down, to US$102.91 at the market close on Sep 24, while it grew 51.54% YTD.

Morgan Stanley has a market cap of US$187.76 billion, while the P/E ratio and the forward P/E one-year are 13.7 and 13.44, respectively. Besides, the EPS is US$7.51.

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The Morgan Stanley stock logged a 52-week high and low of US$105.81 and US$45.86, respectively. The trading volume on Sep 24 was 5,529,301.

Morgan Stanley plans to release its Q3 results on October 14.

Morgan Stanley’s net revenue jumped from US$13.66 billion in Q2, FY20, to US$14.75 billion in Q2, FY21. The net income attributable to the company was US$3.51 billion, or US$1.85 per diluted share, against an income of US$3.19 billion, or US$1.96 per diluted share, in Q2, FY20.

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Bottomline


The S&P 500 Index’s financial segment surged 29.77% YTD, while the PE ratio was 13.42. A likely rate hike after the stimulus tapering might help the banks boost income from interest payments. However, investors should evaluate the companies carefully before investing.

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