Top 7 financial stocks on NYSE to explore

Highlights

• The number loan disbursals dropped across segments in January, except commercial real estate and auto, according to the Federal Reserve’s weekly loan report.

• The demand for business loans has picked up in the US lately.

• The NYSE Financial Index rose around 20% in one year. 

As the central bank is preparing to raise interest rates from mid-March, the banks will likely benefit from the move. Their net interest margin would increase, and so is the bottom line. 

The demand for business loans has picked up in the US lately, which is good news for banks. Companies are spending more on restocking inventories. Credit card spending has also increased. However, demand for refinancing and home loans has been falling. 

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According to the Federal Reserve’s weekly loan report, loan disbursals have dropped in January across all segments, except commercial real estate and auto.

Here we discuss NYSE's top seven financial stocks based on market capitalization.

Berkshire Hathaway Inc. (BRK/A) 

Market Cap: US$713.85 billion

Closing price on February 2, 2022: US$4,79,500.00

One year return: 36.72%

Berkshire Hathaway is a holding company. It has interests in diverse businesses, including utility, energy, manufacturing, retail, etc. It is headquartered in Omaha, Nebraska.

It posted revenue of US$70.58 billion and a net income of US$10.34 billion for the September quarter of 2021. Its P/E ratio is 8.56.

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JP Morgan Chase & Co. (JPM) 

Market Cap: US$442.9 billion
Closing price on February 2, 2022: US$149.94
One year return: 10.95%

The New York-based JPMorgan Chase is one of the largest financial institutions in the US. It offers corporate and investment banking, asset, and wealth management services, etc.

The company declared its Q4 and full year results on January 14. For the fiscal year ended December 31, 2021, it posted net interest income of US$52.31 billion.

Its net income was US$48.33 billion or US$15.36 per share diluted. As of December 31, 2021, the bank had US$3.7 trillion in assets and US$294.1 billion in equities.

Its P/E ratio is 9.8, the forward P/E for one year is 13.50. It pays annualized dividend of US$4.00, while its dividend yield is 2.7%.

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Bank of America Corporation (BAC) 

Market Cap: US$403.6 billion
Closing price on February 2, 2022: US$46.89
One year return: 48.48%

The North Carolina-based Bank of America operates in many countries. Its operating segments are consumer banking, global banking, global markets, and global wealth and investment management.

The company serves approximately 67 million customers, including businesses, worldwide. It has around 4,200 retail financial centers, and roughly 16,000 ATMs in the US.

For fiscal year ended December 31, 2021, its net interest income was US$42.93 billion and the net income was US$31.98 billion or US$3.57 per share diluted.

Its P/E ratio is 13.14, the forward P/E for one year is 14.47, the dividend yield is 1.79%, and the annualized dividend is US$0.84.

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Wells Fargo & Company (WFC) 

Market Cap: US$214 billion
Closing price on February 2, 2022: US$55.93
One year return: 76.4%

The San Francisco, California-based Wells Fargo is one of the largest banks in the US. Its four operating segments are consumer banking, commercial banking, corporate & investment banking, and wealth & investment management.

The bank has around US$1.9 trillion in assets. It was ranked 37^th on the Fortune’s list of America’s largest corporations in 2021. It serves roughly over 10% of small businesses in the US.

For the fiscal year ended December 31, 2021, its net interest income was US$35.78 billion, and the net income was US$21.55 billion or US$4.95 per share diluted. The total revenue from net interest and non-interest income was US$78.49 billion in FY2021.

Its P/E ratio is 11.08, the forward P/E for one year is 14.34, the dividend yield is 1.44%, and the annualized dividend is US$1.00.

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Morgan Stanley (MS) 

Market Cap: US$182.9 billion

Closing price on February 2, 2022: US$103.92

One year return: 49.19% 

Morgan Stanley is a global investment bank based in New York. It had 70,000 employees at the end of 2021. Its three operating segments are wealth management, investment management, and institutional securities.

For the fiscal year 2021, its net revenues were US$59.8 billion and net income applicable to Morgan Stanley was US$15.0 billion. The EPS diluted came in at US$8.03 and ROTCE was 19.8%. 

Its P/E ratio is 12.85, and the forward P/E for one year is 13.50. The dividend yield is 2.69%, with an annualized dividend of US$2.80. 

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Source – pixabay

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Charles Schwab Corporation (SCHW)

Market Cap: US$170.2 billion

Closing price on February 2, 2022: US$90.36

One year return: 69.02%

 Charles Schwab is a banking, asset management and brokerage company based in San Francisco, California. Its total assets touched US$8.14 trillion as of December 31, 2021.

For the 12 months ended December 31, 2021, its GAAP net income was US$5.9 billion, up 77%, from US$3.3 billion in the previous year. The revenue was US$18.5 billion, up 58% YoY. The EPS diluted was US$2.83.

 The SCHW stock has a P/E ratio of 31.93 and a forward P/E for one year of 23.11. The dividend yield is 0.8%, with an annualized dividend of US$0.80.

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Blackstone Inc. (BX)

Market Cap: US$98.6 billion

Closing price on February 2, 2022: US$137.98

One year return: 97.25%

Blackstone is one of the alternative asset managers based in New York. It had around US$731 billion in asset under management at the end of the September quarter of FY2021. Its operating segments are private equity, real estate, credit & insurance, and hedge fund solutions.

 For the fiscal year ended 2021, its revenue was US$22.57 billion, and the net income was US$5.85 billion or US$8.13 per share diluted.

 Its P/E ratio is 16.55, and the forward P/E for one year is 25.32. The dividend yield is 3.23%, with an annualized dividend of US$5.80.

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Bottomline

Fed's quarterly Senior Loan Officer Opinion Survey showed the demand for business loans increased substantially in the US in the fourth quarter of 2021. The NYSE Financial Index rose around 20% in one year. Investors, however, should apply due diligence before investing in stocks