Fintech
Top 3 Fintech Stocks to Buy in July 2024
Financial technology companies make it easy to manage your money, borrow extra money, and increase your savings through various investments. Many companies have made progress over the years, allowing you to view your finances from a single dashboard.
These innovations have led to many gains for long-term investors. Some fintech stocks have continued to march forward, presenting long-term opportunities for patient investors. Other fintech stocks have been sideways, but appear poised to change the script.
Although people have been using various financial apps and products for decades, the fintech market is still expected to maintain a Compound annual growth rate of 16.5% through 2032. The tailwinds remain strong for the sector, as payment processing, peer-to-peer lending, fraud detection, blockchain technology, and other solutions expand what’s possible in the space. The sector’s success has also produced plenty of returns for long-term investors. Here are some of the best fintech stocks to buy.
Robin Hood (HOOD)
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Robin Hood (NASDAQ:HOOD) has brought several innovations to the financial industry that have forced other brokerage firms to act. The company pioneered commission-free stock trading and has also innovated in other areas. Robinhood Gold is the company’s latest product, which is likely to change the financial landscape.
A Gold Membership offers 5% APY on cash in hand, 1% increments for every qualifying deposit, a credit card with 3% unlimited cash back on all purchases, 3% IRA matching, and other perks. Membership is $50 per year, which is less than many credit cards with fewer perks. Robinhood launched its credit card and other parts of Robinhood Gold a few months ago. This offering could significantly change the fintech industry in a few years.
While Robinhood stock is still far from its highs, it is bouncing back. Shares have gained 83% year to date, propelling the company to a $20 billion valuation.
Seen (V)
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Visa (London share:AND) is a leading credit and debit card issuer that consistently posts net profit margins above 50%. The company generates a lot of cash flow that it distributes to investors in the form of dividends and share repurchases. The company distributed $3.8 billion to investors in second quarter of fiscal year 2024. That quarter also saw revenue and net income growth rates of 10% year-over-year. Cross-border volume growth was a key driver of the business, up 16% from the year-ago quarter.
Visa is up just 3% year-to-date, but has gained 54% over the past five years. While the stock has underperformed S&P 500 Index and the Nasdaq Compositeis less likely to experience a sharp decline amid an economic downturn. People continue to use their credit and debit cards in any economy, which translates into steady revenue and earnings for the company. The stock trades at a P/E ratio of 33 and offers a yield of 0.78%. Although the yield is low, Visa has had an impressive double-digit dividend growth rate for several years.
Holding Company (NU)
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New participations (NASDAQ:NEW) is a Brazilian digital bank that has closed its doors first quarter with 99.3 million customers. That’s a 26% year-over-year improvement. Even better, 82.6 million customers are still active.
The fintech company offers a variety of financial products: bank accounts, brokerage accounts, personal loans, credit cards, and more. It has had great success in Latin America and has consistently posted impressive growth rates. Revenue increased 69% year-over-year to $2.74 billion, while net income reached $378.8 million. This figure represents a year-over-year growth rate of 167%.
Nu Holdings is off to a strong start with a 57% gain year-to-date. The stock has a P/E ratio of 50, but the high earnings growth makes the valuation easier to justify. Wall Street analysts don’t seem to be concerned about the valuation, as they are becoming increasingly bullish on the stock. Nu Holdings is currently rated Strong Buy and has a 9% increase expected compared to current levels.
As of the date of publication, Marc Guberti had no (direct or indirect) positions in the securities mentioned in this article. The views expressed in this article are those of the author, subject to InvestorPlace.com rules Publishing Guidelines.
As of the date of publication, the responsible editor did not hold (either directly or indirectly) any position in the securities mentioned in this article.
Marc Guberti is a freelance finance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including US News & World Report, Benzinga, and Joy Wallet.