- Western Union (WU): Provides multiple services crucial to the unbanked population worldwide.
- SoFi Technologies (SOFI): Is looking for new investment opportunities and has acquired a core banking system that will allow it to diversify its revenue sources.
- First Hawaiian (FHB): Continued paying dividends despite economic pressures in Hawaii during the pandemic, showing its robustness under pressure.
Banks have been in some real trouble lately, yet there is still hope they can bounce back. After a couple of years of rock-bottom interest rates, the environment is changing, leading to renewed interest in financial stocks.
Federal Reserve policy is typically known for having a neutral-to-dovish stance, implying the Fed is not waiting until there’s an imbalance to get involved in the market. Right now, however, this is not necessarily the case, as it is focused on stabilizing inflation.
With the increase in interest rates, banks have more opportunities to make more money on loans. They can charge higher interest rates than before while increasing their regular revenue stream.
These financial stocks have excellent prospects right now because of the state of the economy. They often use these profits to support generous dividend payments and improve their operation to reward shareholders through capital increases. Therefore, keep these picks in mind when analyzing your portfolio.
Western Union (WU)
Western Union (NYSE:WU) has been around for more than 100 years, and it provides financial services to people in need. It offers money transfers and payment systems, international money transfers, currency exchange, an ATM network and mobile banking services.
The company was originally founded as a telegraph company. Eventually, it expanded into other business areas such as insurance, securities trading and banking services.
Although Western Union is a legacy company, it still provides valuable services and significantly contributes to the industry worldwide. Roughly 2 billion people still do not have access to a conventional bank account or any other financial institution, and frequently utilize the company’s offerings.
Western Union relies on its services and consumer-to-consumer transfers. This allows customers to send payments across borders, helping them pay bills and transfer money internationally.
WU stock has been a great pick for income investors looking to make steady dividend payments. The company has grown at a healthy pace and maintained dividend payments. Therefore, it’s an all-weather play that is a great option for your portfolio.
SoFi Technologies (SOFI)
SoFi Technologies (NASDAQ:SOFI) offers personal financial products for individuals and families, including student and auto loan refinancing. It has an app that helps people save money and keep track of their budgets.
SoFi uses artificial intelligence (AI) to provide financial products for its customers. In addition to its app, the company also has an online platform where users can manage their finances and make payments with ease.
Since the start of the year, investors have been losing interest in growth stocks due to the general macroeconomic environment. Therefore, SoFi is not doing so well and has lost considerable steam since the start of last year. Shares are down 58% since the beginning of the year, making it a contrarian play.
SoFi has been investing heavily to grow its banking platform, and it has acquired cloud-based core banking system Technisys to help it expand. The company has also received a bank charter that will allow it to diversify its revenue.
First Hawaiian (FHB)
First Hawaiian (NASDAQ:FHB) is a leading global bank in the Pacific and Latin American markets. It has more than 2,100 employees across Hawaii, Guam and Saipan and has provided banking services for more than 100 years.
The company focuses on providing banking services and solutions to individuals, small businesses and large corporations worldwide. It offers mortgages, loans for cars, leases for businesses and more.
First Hawaiian understands its market like no other. It has been active on the islands for many decades, and its local industry knowledge sets it apart.
FHB stock also deserves credit for the way it handled the pandemic. Unfortunately, Covid-19’s impact on economic ventures was much worse in Hawaii than mainland U.S. economies. However, the bank continued paying dividends despite its pressures. Its yield of nearly 4% is exceptional in the industry. Hence, it’s a robust name among financial stocks.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.