Investing in fintech stocks can be a lucrative way to build wealth in the stock market. These stocks represent a diverse array of sectors, including payment processing, digital banking, lending, and more.
Investors seeking exposure to these stocks are drawn to their potential for disruption, as well as the ability to provide outsized returns. This has certainly been the case over the last several decades for investors in companies like Visa and Mastercard. Amidst a rapidly digitized global economy, there exists a unique class of fintech stocks positioning themselves as frontrunners for the future of finance.
Now, let’s unpack the best fintech stocks that will make investors exceedingly wealthy!
Top Fintech Stocks: Fiserv (FI)
Fiserv (NYSE:FI) has largely flown under the radar for the last several years. However, they are a global leader and financial technology company set to outperform over the next decade. This is a result of their accelerating profitability and operating margin expansion.
Fiserv’s core strength lies in its comprehensive suite of solutions. Some of its product offerings include banking, digital payment processing, and fraud prevention tools. This one-stop-shop approach makes Fiserv an extremely attractive partner to financial institutions. Furthermore, the company has made strategic acquisitions to strengthen its positioning in the financial technology landscape.
Most notably, their acquisition of First Data for a record $22 billion in 2019. In FY23, the company delivered record revenue of $18.04 billion. EPS increased 16% YOY to $4.98 per share, with FCF up 14% to $4.02 billion. Management forecast double digit revenue and EPS growth in the 2024 fiscal year, making Fiserv one of the top fintech stocks to buy in 2024.
American Express (AXP)
American Express (NYSE:AXP), while often seen as a traditional credit card company, has quietly been transforming itself into a major fintech player. The company has embraced digital innovation and is actively expanding its product offerings beyond credit cards.
American Express has been on a roll in the last year, after the company delivered record financial results in 2023. They enjoy a budding reputation for providing premium service and customer satisfaction, which translates into higher customer retention and spending. However, investors are now excited about the long term growth potential of their suite of digital payment solutions. This includes mobile wallets, contactless payments, and online payment processing services.
In the 2023 fiscal year, the company saw record revenue growth of $60.5 billion. EPS increased 14% YOY to $11.21 per share, with demand for premium card membership remaining strong. American Express is investing heavily into the Millennial and Gen Z segment, which they believe will be a primary growth driver over the next decade. Additionally, they recently raised their quarterly dividend by 17% to $0.70 per share. Management remains extremely bullish, as they guide double digit revenue and EPS growth in the 2024.
Payoneer (PAYO)
Payoneer (NASDAQ:PAYO), is a leading provider of cross-border payment solutions ideally suited for today’s digitized economy. The company’s platform facilitates seamless transitions for businesses and freelancers, eliminating the complexities and high fees often associated with cross-border transactions.
One of the key differentiators for Payoneer is its focus on emerging markets. The company has established a strong presence in regions with a high demand for cross-border payments, such as Asia and Latin America. They have also placed increased focus on their B2B and merchant service businesses, which has led to significant increases in their user base and transaction volume. Additionally, the company achieved its first full year of GAAP profitability as a public company.
The company’s revenue skyrocketed 32% YOY to $831.1 million in FY23. EPS came in at $0.24 per share, compared to a loss of $0.03 per share in 2022. Furthermore, FCF more than doubled to $112 million, signally management’s strong execution and ability to drive profitable growth. While Payoneer might be a riskier proposition, its high growth potential offers investors a chance for substantial returns.
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.
