The growth opportunities in financial technology continue to excite investors on Wall Street. Strong buy fintech stocks remain prime investment opportunities despite their outsized returns over the last decade.
Many of these companies have earned ‘’strong buy’’ endorsements from some of Wall Street’s top analysts. However, you don’t need their confirmation when you peel back the layer and understand the present market opportunities.
Notably, artificial intelligence is expected to be pivotal in their growth trajectory. These companies will be able to harness the power of AI to enhance efficiency, security and customer experience. With the fintech digital renaissance accelerating, these fintech monsters are poised for significant growth for years to come.
Now, let’s discover the three best fintech stocks Wall Street cannot stop raving about!
Visa (V)
Visa (NYSE:V) is an American multinational payment processing company headquartered in San Francisco. They’re one of the world’s most valuable companies and have continued to deliver tremendous returns for shareholders over the last decade.
Visa can be considered the holy grail regarding fintech stock investing. The top and bottom-line growth of the payment processing giant has been a treasure for Wall Street analysts. However, their demonstrated history of returning capital to shareholders has been a treat. Visa has delivered a 15% CAGR in its dividend over the last decade, and its low % payout ratio of 21.5% is a very healthy sign.
In Q1 FY24, Visa continued to grow top-line revenue by 9% to $8.6 billion. Cross-border transaction growth remained strong, with payment volume up 8% and cross-border volume up 16%, respectively. Furthermore, GAAP EPS grew 20% YOY to $2.39 per share. It is clear that Visa continues to execute on all cylinders, and the 2024 fiscal year is already off to a great start.
American Express (AXP)
American Express (NYSE:AXP) just closed off a strong 2023 fiscal year with double-digit revenue and EPS growth. Management remained extremely bullish on the long-term growth in the Millenial and Gen Z segments.
Unsurprisingly, American Express continues to march to new all-time highs in February. The advent of inflation and higher interest rates continued to fuel the company’s top and bottom line in FY23. Consumers cut back on discretionary spending in 2023, but not nearly enough, as U.S. credit card debt hit a record $1 trillion. Furthermore, average retail credit card rates continue to rise across the country.
In FY23, the company saw record revenue of $60.5 billion, up 14% YOY. Additionally, EPS saw strong double-digit growth, increasing 14% to $11.21 per share. Demand for premium card membership plans remains robust, and they continue to focus on optimizing the millennial and Gen Z segment. Management remains extremely bullish after announcing a 17% quarterly dividend increase to $0.71 per share. With CEO Stephen Squeri guiding double-digit growth in FY24, AXP is one of the best cheap fintech stocks to buy for 2024.
Fiserv (FI)
Fiserv (NYSE:FI) is an under-the-radar fintech stock you may have never heard of before. They are a leading global fintech and payments company slowly making its case in the industry as a household name.
Over the last decade, Fiserv’s strong execution has translated to significant growth in revenue and EPS. The company has made several strategic acquisitions accretive to its strategic positioning in the digital payments market. Most notably, they acquired First Data for a record $22 billion in an all-stock deal in 2019.
The 2023 fiscal year was strong, with revenue up 8% YOY to $18.04 billion. Additionally, EPS increased by 16% YOY to $4.98 per share. FCF swelled 14% to $4.02 billion, driven by solid execution and improved asset structure optimization. Fiserv has reiterated its commitment to driving strong operating performance, expecting approximately 16% organic revenue growth and 15% EPS growth in FY24. Therefore, investors might want to watch this sleeper fintech stock for 2024 and beyond.
On the date of publication, Terel Miles 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.
