Top financial stocks to explore in September amid rate hike fears

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Top financial stocks to explore in September amid rate hike fears

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 Top financial stocks to explore in September amid rate hike fears
Image source: © Wisconsinart | Megapixl.com

Highlights:

  • JPMorgan Chase (NYSE: JPM) paid a dividend of US$ 1.
  • Wells Fargo & Company has a market cap of US$ 116.6 billion.
  • Bank of America Corporation reported a revenue of US$ 22,688 in Q2 2022. 

After Jerome Powell’s Jackson Hole speech, it seems that interest rate hikes are here to stay until inflation reaches its standard mark of two per cent.

So, while it has a perilous impact on the stock market, certain sectors withstand the turbulence caused by rate hikes. The financial industry could be one such sector to explore during such times.

The financial sector has historically been sensitive to rate hikes. It gains when an interest rate hikes due to increased profit margins. Some analysts believe that stocks of banks, insurance companies, money managers, and brokers usually benefit from a rate hike.

Stocks like Bank of America Corporation (NYSE: BAC), which has a Pan-American presence, and JPMorgan Chase (NYSE: JPM), which also has a large customer base across the US, could be explored by long-term investors.

Here, we explore five financial stocks picked by Kalkine Media® and see their performances:

JPMorgan Chase (NYSE: JPM)

US investment MNC bank, JPMorgan Chase & Co., is based out of New York City. It is among the largest financial institutions in the country, operating mainly in four segments-consumer banking, investment banking, commercial banking, and asset & wealth management.

The US$ 333.6 billion company, JPMorgan, distributed a quarterly dividend of US$ 1 apiece. The JPM stock plummeted more than 29 per cent year-to-date (YTD). However, it has seen a slow growth of 0.15 per cent in the past month.

JPM stock reached its 52-week highest price of US$ 172.96 on October 25, 2021, while it hit its lowest price on July 14, 2022, at US$ 106.06.

JPMorgan announced the acquisition of Global Shares, a cloud-based software provider, on August 11, 2022.

For the second quarter of 2022, the company reported a net income of US$ 8.6 billion and earnings-per-share of US$ 2.76.  JPMorgan reported a managed revenue of US$ 31.6 billion in Q2 2022. 

In its 2022 outlook, JPMorgan expects net interest income excluding markets to be more than US$ 58 billion.

Wells Fargo & Company (NYSE: WFC)

Wells Fargo & Company is a US multinational bank and one of the country's largest. It deals in consumer banking, corporate and commercial banking, investment banking, etc. Its corporate headquarter is in San Francisco, while its operational headquarter is in Manhattan.

Wells Fargo is a US$ 165.8 billion market valuation company. It last announced a quarterly dividend of US$ 0.3 per share.

The share price of Wells Fargo decreased by over three per cent on a yearly basis. However, it has seen a surge of 0.87 per cent over the past month.

Shares of Wells Fargo peaked at its 52-week high of US$ 60.30 on February 10, 2022, while it hit its 52-week lowest at US$ 36.54 on June 16, 2022.

Wells Fargo reported its second quarter financial results for 2022 on July 15, registering total revenue of US$ 17,028 million.

The net income in Q2 of 2022 was US$ 3,119 million. In a statement, Wells Fargo CEO Charlie Scharf said that the bank’s expenses are declining, and the rising interest rates drive strong net income growth.

Wells Fargo & Company (NYSE: WFC) Revenue and Net incomeSource: ©Kalkine Media®; © Canva via Canva.com

PayPal Holdings, Inc. (NASDAQ: PYPL)

PayPal Holdings, Inc. is a technology-driven US online payment system that helps transborder money transfers between merchants and consumers. The platform has millions of active users, including over 34 million merchant accounts.

PayPal’s market valuation is US$ 108.06 billion. The PYPL stock dived more than 52 per cent YTD. However, it has increased by over 4.6 per cent since the past month.

The stock reached its highest 52-week price of US$ 296.70 on September 8, 2021. Its 52-week lowest price was US$ 67.58 on June 30, 2022.

PayPal registered robust Q2 2022 financial results and sequential revenue acceleration. Its net revenue (GAAP) was US$ 6.8 billion in Q2 of 2022, and an operating income of US$ 0.8 billion.

PayPal repurchased about eight million shares of common stock, returning US$ 750 million to shareholders in Q2 2022. For the quarter that ended June 30, 2022, PayPal’s total debt was US$ 10.6 billion, including US$ 3.0 billion of new issuance in May this year.

Bank of America Corporation (NYSE: BAC)

Based out of Charlotte, North Carolina, Bank of America Corporation is a global US investment bank and financial services company. With operations in several countries, Bank of America deals in consumer banking, global wealth and investment management, etc.

Bank of America is a US$ 268.29 billion company, and it distributes a dividend of US$ 0.22 per share on a quarterly basis. On a year-over-year basis, BAC stock skidded below 18 per cent. However, it has gained by 0.56 over the past month.

Its 52-week highest price was US$ 50.11 on February 10, 2022, while it hit the 52-week bottom price of US$ 29.67 on July 14, 2022.

On August 30, Bank of America announced the launch of a new zero down payment, zero closing cost mortgage solution for people who are going to buy homes for the first time.

Bank of America registered total revenue of US$ 22,688 million in the second quarter of fiscal 2022, compared to US$ 21,466 million in the same period a year earlier.

Its net income for Q2 2021 was US$ 6,247 million relative to US$ 9,224 million in Q2 2021.

HSBC Holdings PLC (NYSE: HSBC)

HSBC Holdings is a British multinational bank and financial services company and is the largest in Europe by total assets. It operates in over 64 countries and has an employee strength of over 220,000 full-time staff.

HSBC has a market valuation of US$ 123.12 billion. The company announced a quarterly dividend of US$ 0.45, payable next on September 29, 2022.

The HSBC stock jumped over 2.26 per cent YTD. The share price of HSBC increased by over 16 per cent on a year-over-year basis. It touched the 52-week highest price of US$ 567.2 on February 11, 2022.

HSBC’s revenue outlook for 2022 remains positive. It expects its net interest income to be at least US$ 31 billion for 2022, while a minimum of US$ 37 billion for 2023.

Bottom line

When volatile and bearish markets, it becomes hard to bank on sectors to earn regular returns. Investors should aim long-term strategies to avoid losing money during market upheavals and build their portfolios with in-depth analysis.

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