7 Financial Stocks With Accelerating Growth

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financial stocks - 7 Financial Stocks With Accelerating Growth

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Usually, when I run my detailed screens across my huge Portfolio Grader database, I have a pretty good idea of what is likely to show up. Not this time …

I figured that when I ran a screen for companies that were seeing accelerated growth I would see some financial technology (fintech) stocks that were coming back from last year’s beating, or I would see a bunch of banks or financial services providers.

What I didn’t expect was a slew of real estate investment trusts (REITs) woven in with interesting financial companies. But that’s what I got. Surprises like this are good for your portfolio … it means my selection process is still objective — otherwise, I wouldn’t be able to surprise myself!

The seven financial stocks with accelerating growth that I have highlighted below include a handful of REITs in dynamic sectors, with a few top-rated financial stocks thrown in for good measure.

Rexford Industrial Realty (REXR)

Rexford Industrial Realty Inc (NYSE:REXR) is an interesting REIT in the fact that it is very focused on one particular region. Most REITs tend to specialize in a sector but diversify their markets.

REXR has chosen to keep it simple and focus on one thing (for now at least): industrial property in Southern California. Granted, this is the largest industrial market in the U.S., so there isn’t a lack of opportunity.

What’s more, the ports in Long Beach and LA are the 2 biggest ports in the U.S., so that helps keep industrial property in demand.

While REXR delivers a nice 2.1% dividend yield, it’s still in a big growth phase now. REXR stock is up nearly 19% year to date and 25% in the past 12 months. If the U.S. and China hammer out a trade deal, its upside is significantly bigger. In the fourth quarter, REXR beat on earnings and, although revenue was soft, it was up 22% year-over-year.

Ladder Capital (LADR)

Ladder Capital Corp (NYSE:LADR) is commercial property REIT that also is involved on the financial side of the game as well. It’s been around for six years now but has established itself as a very attractive income machine.

For example, last year, it delivered a nearly 8% dividend and then handed out a special dividend at the end of the year on top of it all, pushing its total dividend to above 9%.

This year, the dividend is around 7.8% (not including the special dividend) and LADR stock is up roughly 13% year to date. And this year should be a busy one for LADR since rates have slowed, it means demand will grow while rates remain low.

LADR is well diversified — both by the location of its property financing as well as the types of properties it finances — and is reasonably priced, selling at a P/E of 8.79, even after its solid run so far this year.

Community Healthcare Trust (CHCT)

Community Healthcare Trust Inc (NYSE:CHCT) has a stock chart that makes it look like it’s some high-flying tech company or biotech with a major breakthrough drug.

CHCT is up roughly 50% in the past 12 months and 24.2% year-to-date. And that doesn’t include its 4.7% dividend.

This REIT focuses on the healthcare sector, buying properties that it then leases to healthcare systems, doctors, hospitals and other healthcare service providers, like urgent care, clinics and healthcare office buildings.

Healthcare is one of those megatrends that will endure, regardless of what’s happening to the economy, or what party is in the control in Washington. As baby boomers start to hit their 60s, the rising demand for healthcare will be there whether Congress does anything or not.

Innovative Industrial Properties (IIPR)

Innovative Industrial Properties Inc (NYSE:IIPR) certainly has a dynamic name for REIT. But that’s because it is in one of the most dynamic sectors in the market today – cannabis.

IIPR owns and manages industrial properties and is one of the leaders in California in leasing facilities to state-licensed operators for medical marijuana cultivation. Since it is one of the pioneers, it has name recognition, which gives it a competitive moat, given state regulations and similar barriers to entry.

It is also a white-hot investment sector, so it’s no surprise that IIPR stock is soaring. Year-to-date it’s already up 31%, and in the past 12 months, it has delivered a 132% return.

Obviously, that kind of growth won’t be a regular thing, but even at those levels, its dividend is still around 2.2%. While it may have a few more years of this kind of growth, even once it settles down, this is a smart long-term play on this sector.

PennantPark Floating Rate Capital (PFLT)

PennantPark Floating Rate Capital Ltd (NYSE:PFLT) basically is a lender that focuses on variable rate first lien debt to middle market companies primarily in the U.S.

Basically, that means it’s a commercial lender that specializes in financing businesses with variable rate loans. This is one market that benefitted from the rising rate environment of last year.

In early February it delivered its Q4 results (FYQ1 for the company) and they showed just that. Earnings beat and revenue also beat by nearly 10%. Revenue was up 56% year-over-year.

This year, rates aren’t looking to move that much, but that means there may be more opportunity to find new customers as they look to finance new projects before rates head up again.

Its 8.7% dividend makes it a great choice for passive income, even if you don’t get a lot of stock growth.

Mastercard (MA)

Mastercard Inc (NYSE:MA) is one of the most recognizable names in the credit card industry. But that isn’t where MA is making a name for itself today. Now it’s about fintech, financial technology both on the back-end with its financial partners and on the front end, growing its brand across new markets and customers.

MA has certainly established itself as a major credit card brand. But its move into debit cards and e-commerce is really where the growth is in the U.S. market and beyond.

Some of this is apparent in its Q4 numbers. Quarterly profits were up 33% year-over-year. And considering the fact that consumer spending was actually down in 2018 compared to Q4 17, that is an impressive number.

MA said in its quarterly call that it expects revenue growth in the ‘mid-teens’ to continue through 2021. Much of that growth is happening outside the U.S., which is where MA has a significant brand presence. It’s starting to pay off.

While MA does deliver a 0.6% dividend, just reinvest those dividends and go for the growth here.

Kinsale Capital (KNSL)

Kinsale Capital Group Inc (NASDAQ:KNSL) is an insurance provider that specializes in excess and surplus (E&S) lines of insurance.

Simply put, E&S insurers provide policy coverage for homes and businesses that need coverage beyond typical property and casualty (P&C) policies. For example, E&S fills the gap for challenging and high-risk properties and business that don’t fit traditional actuarial models like mobile homes, day care centers and even properties a large as refineries.

Wherever this increased risk that can’t be covered by a broad P&C policy is where E&S comes in. And this is all KNSL focuses on, specifically small- to mid-sized accounts. That gives them a niche that many big insurers don’t spend too much time trying to woo.

The dividend is just 0.53% but it’s a solid grower — up 23.39% in the past 12 months — and is a good long-term play in a growing sector.

Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough StocksAccelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, https://investorplace.com/2019/02/financial-stocks-to-buy-high-growth-income/.

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