The fintech industry is growing rapidly in 2024, making the case for the best fintech stocks to buy on a dip. Despite operating in a more challenging macroeconomic environment, fintech companies continue expanding their revenue and earnings.
August has been off to an extremely volatile start, to say the least. Earlier this week, Japan’s Nikkei saw its worst single-day crash since the notorious black Monday of 1987. The index plunged more than 12%, sending a ripple effect across the global stock market. Many stocks fell substantially, even the ones that have shown strong fundamentals and noteworthy forward guidance for this year.
Ultimately, this dip has created a great buying opportunity for investors looking to capitalize on the growth of the fintech sector. While the stock market volatility may not have reached its peak, investors strategically positioned to seize the moment will be rewarded handsomely.
Here are the best fintech stocks to buy on a dip in August!
American Express (AXP)
American Express (NYSE:AXP), commonly known for its premium credit card offerings, is one of the best fintech stocks to buy on a dip in August. The company’s strong outlook for 2024, coupled with its expanding earnings, makes it extremely compelling.
American Express’s focus on premium credit card offerings has worked wonders for its business. Last year, American Express reported record revenue and added 12.2 million premium cardholders to its global network. Strong customer engagement and higher credit quality continue to fuel the company’s earnings growth in 2024. Moreover, CEO Stephen Squeri remains extremely confident in its ability to maintain momentum after raising its full year guidance in the second quarter.
In Q2 FY24, revenue increased 9% yearly to a record $16.3 billion. Earnings per share swelled 44% to $4.15 per share, with the company continuing to drive robust growth in billings and new card acquisitions. With full year earnings per share guidance now in the $13.30-$13.80 range, AXP stock remains a strong buy in August.
Fiserv (FI)
Fiserv (NYSE:FI) is another fintech company that investors should watch closely in August. With stock market volatility likely to persist this year, a potential dip under $140 presents a great buying opportunity for long term investors.
Fiserv is a growth company in the fintech space that Wall Street is just starting to notice. After its stock price surge at the end of 2023, investors began seeing its true earnings and cash flow potential. In the 2023 fiscal year, Fiserv’s net earnings increased 21% yearly to $3.06 billion. Its free cash flow rose by 20% to $3.77 billion, with operating expansion by 453 basis points to 25.53%.
Its results exceeded Wall Street’s expectations, and its momentum is gaining steam ahead in 2024. In the second quarter, revenue increased 7% yearly to $5.11 billion. Net earnings rose 31% to $894 million, or $1.53 per share. The company’s affirmed 15-17% organic revenue and raised adjusted EPS outlook is a great sign for the business moving forward.
Paychex (PAYX)
Paychex (NASDAQ:PAYX), a leading provider of human capital management services, is the final selection for fintech stocks to buy on a dip. After reporting extremely solid full-year 2024 fiscal results, the company deserves a much closer look in August.
Paychex is an integral partner to small and medium-sized enterprises (SMEs). Since its founding more than five decades ago, it has built an extremely loyal customer base of over 740,000 businesses. This is no easy feat, and Paychex’s high customer retention rates are a testament to its trust in its customers. However, Paychex’s business model, which benefits from recurring revenue and high margins, makes it stand out.
Its high customer satisfaction levels have also contributed immensely to its sequential growth in free cash flow since the COVID-19 pandemic. In FY24, revenue increased 5% yearly to $5.27 billion. Earnings per share swelled 9% from the year prior despite tight labor market conditions and persistent inflation. Its strong revenue, adjusted EPS and operating margin guidance for 2025 validate the strength of its business model and loyal customer base.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
