Fintech stocks continue to witness greater investor attention because financial services are becoming more innovative when processing transactions, servicing customer needs and participating in the growth of cloud-based platform adoption.
The innovation and growth within the industry give investors seeking lesser-known companies the opportunity to buy in early and experience a greater upside potential than stocks all investors have eyes on, such as large financial services companies like Visa (NYSE:V), Mastercard (NYSE:MA) and PayPal (NASDAQ:PYPL).
Below are several hidden-gem fintech stocks that have seen considerable growth in their share price compared to peers. These stocks are great picks for investors seeking exposure to this expanding industry.
StoneCo (STNE)
StoneCo (NASDAQ:STNE) is a transaction processing company for its customer base in Brazil. STNE provides its commerce technology for typically small businesses both online and brick-and-mortar.
Over this past year, StoneCo has seen its share price rise by 78%, mainly due to its third-quarter earnings results for 2023. The reported stated net revenue grew by 25%, and its adjusted net income increased by 109% year-over-year. Active payment users saw a year-over-year growth of approximately 42%. STNE’s sales for its financial services and software segments increased by 29% and 6%, respectively.
StoneCo’s positive earnings results and other events, such as a $468 million credit facility from a financial corporation, have given it greater growth potential. There was also an upgrade by Goldman Sachs Group (NYSE:GS), citing its improved future outlook and impressive financial results.
StoneCo recently provided investors with numerous positive events, which may lead the company to even greater upside potential, especially during a market upswing.
Fiserv (FI)
Fiserv (NYSE:FI) is a payment servicing company that provides a cloud-based business platform.
The company recently launched its small business performance indicator, the Fiserv Small Business Index, which provides analytical services for consumer demand in multiple sectors, including retail, restaurant and technical services.
On February 6, Fiserv announced its fourth quarter full-year financial results for 2023, stating total sales increased by 6% and net income grew by 11% year-over-year. Fiserv mentioned it repurchased nearly 9 million shares in the fourth quarter, and its free cash flow increased by 14% compared to the previous year.
Fiserv is well positioned for future success throughout 2024, represented by its share price growth of approximately 23% within the last year. It beat analysts’ expectations for the recent earnings result for EPS and total revenue.
Fiserv is a company projected to see revenue growth of between 15% and 17% outlook for 2024, slightly greater than the organic growth from 2023. Other positive results regarding the company’s financial position make it a great opportunity for investors seeking a stable fintech company that continues to grow.
Mizuho Financial Group (MFG)
Mizuho Financial Group (NYSE:MFG) is a banking service company that provides its customer base with deposit products, asset management and payroll services. It also participates in underwriting equities.
It is a global banking company seeking opportunities like investing in the fintech industry with companies like DirectBooks, a financial communications platform. In fact, Mizuho has given it a strategic investment and joined its board of directors.
On February 2, MFG reported earnings for the third quarter, stating that total revenue increased by 43% and its EPS grew by 18% compared to the year previously.
Its stock price rose by 12% over the last six months due to the company’s improved financial results, and it also offers a decent dividend yield of 3.54%. The payout is distributed semiannually, with the most recent payment to investors being seven cents per share in December 2023.
Mizuho saw a solid year of consistent returns for investors. There is a high potential this trend will continue throughout 2024, especially if Mizuho increases its exposure to the fintech industry.
As of this writing, Noah Bolton did not hold (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.
