Wall Street Favorites: 3 Financial Services Stocks With Strong Buy Ratings for April 2024


  • Financial services stocks can provide stability and upside for long-term investors. 
  • JPMorgan Chase (JPM): The largest investment bank in the world has benefited from prolonged higher interest rates.
  • Mastercard (MA): A global payment services leader that is seeing analyst upgrades ahead of its earnings report.
  • Berkshire Hathaway (BRK-B): Warren Buffet’s holding company is always used as a benchmark stock fund for investors. 


Financial Services Stocks - Wall Street Favorites: 3 Financial Services Stocks With Strong Buy Ratings for April 2024

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The financial sector has long been the backbone of the stock market. Financials hold the second-largest weight by sector in the S&P 500 with a 13.12%. Five of the thirty components of the Dow Jones Industrial Average are financial stocks. These companies provide products and services for everything from banking and investing to payments and insurance. 

But financial stocks also have a reputation for being boring and conservative. While they might lack the growth potential of tech stocks, there are plenty of financial stocks that beat the market consistently. Add in lower volatility and even the potential for a dividend and it becomes clear that investors with financial stocks in their portfolios sleep well at night. Here are three financial services stocks that we have on our radar for April 2024.

JPMorgan Chase (JPM)

Chase Bank logo and storefront
Source: Daryl L / Shutterstock.com

JPMorgan Chase (NYSE:JPM) is the world’s largest bank by market capitalization and the twelfth-largest company in the world. The stock has returned nearly 14.0% year-to-date and pays a 2.35% quarterly dividend to shareholders. The average Wall Street analyst price target is $200.76 with a street-high target of $230.00 per share. 

Heading into earnings season for the first quarter of 2024, JPMorgan and the financial sector are always the first major companies to report. JPMorgan’s earnings tend to set the tone for the rest of the sector and many on Wall Street heed CEO Jamie Dimon’s annual letter to shareholders. This letter is usually released in April and addresses the current state of the US economy. As with most banks, JPMorgan has benefited from higher interest rates and that should continue for its April earnings report. 

JPMorgan is one of the most efficiently operated banks in the world. The stock is very reasonably priced, trading at just 3.77x sales and 12.36x forward earnings. Over the past eight years, JPMorgan has increased its net income by a compound annual growth rate (CAGR) of ten percent. Owning JPM stock is owning the gold standard in global banking at a reasonable valuation compared to its annual growth. 

Mastercard (MA)

Close up of a pile of mastercard credit load debit bank cards.
Source: David Cardinez / Shutterstock.com

Mastercard (NYSE:MA) is the world’s second-largest payment company next to Visa (NYSE:V) and the third-largest financial services stock by market cap. It is a very highly regarded stock with 34 analyst ratings of Buy or Strong Buy in March. The average analyst price target sits at $508.52 which is nearly 10% higher than the current stock price. 

Credit card companies like Mastercard are nearly recession-proof stocks. Why? Because consumer spending continues even when interest rates are high and the economy is struggling. As prices rise, there is a higher chance that consumers will hold credit card debt. This is of course bad for consumers but can be seen as a positive for Mastercard and its shareholders. Ahead of its earnings call at the end of April, the stock received a price target of $535.00 from Susquehanna

For a consistent, industry leader, you will pay a bit of a premium for Mastercard. Shares currently trade at 18x sales and 33.11x forward earnings. With a five-year revenue CAGR of 11%, Mastercard shows that even the largest companies can continue to steadily grow over time. 

Berkshire Hathaway (BRK-A,BRK-B)

A close-up of a Berkshire Hathaway (BRK-A, BRK-B) office in Terra Haute, Indiana.
Source: Jonathan Weiss / Shutterstock.com

Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) is an American holding company that is the eighth-largest company in the world by market cap with a value of nearly $900 billion. Despite the aura behind the stock, only a handful of Wall Street analysts cover it. The average price target of $477.00 represents a 13% upside from the current stock price. 

The Omaha-based company is best known for its two executives: Warren Buffett and the late Charlie Munger. Buffett is widely considered the best value investor of our generation. The Berkshire Hathaway investment portfolio is also considered one of the benchmark funds to track.

BRK-B does not pay a dividend, but shareholders are more than happy with its growth. Shares hit a new all-time high earlier this year and have returned nearly 15% year-to-date. The stock trades at about 2.0x sales despite having a five-year revenue CAGR of 8.0% and TTM revenue of over $364 billion. 

On the date of publication, Ian Hartana and Vayun Chugh 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.

Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/wall-street-favorites-3-financial-services-stocks-with-strong-buy-ratings-for-april-2024/.

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