Financial firms serve as the backbone of the economy, providing essential services from lending and investment management to risk management and payment processing. But uncertainty about fiscal and monetary policy has tempered enthusiasm, limiting the industry's gains to 2.2% over the past six months. This return lagged the S&P 500's 4.7% climb.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here is one financials stock boasting a durable advantage and two we’re swiping left on.
Two Financials Stocks to Sell:
Bread Financial (BFH)
Market Cap: $2.79 billion
Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE: BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.
Why Should You Sell BFH?
- Annual sales declines of 5.4% for the past two years show its products and services struggled to connect with the market during this cycle
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 6.8% annually while its revenue grew
Bread Financial’s stock price of $59.87 implies a valuation ratio of 7.8x forward P/E. Check out our free in-depth research report to learn more about why BFH doesn’t pass our bar.
Hercules Capital (HTGC)
Market Cap: $3.44 billion
Named after the mythological hero known for his strength, Hercules Capital (NYSE: HTGC) is a business development company that provides debt financing to venture capital-backed and growth-stage technology and life sciences companies.
Why Are We Hesitant About HTGC?
- Incremental sales over the last two years were less profitable as its 2.1% annual earnings per share growth lagged its revenue gains
Hercules Capital is trading at $19.16 per share, or 9.5x forward P/E. Dive into our free research report to see why there are better opportunities than HTGC.
One Financials Stock to Watch:
Moelis (MC)
Market Cap: $5.29 billion
Founded in 2007 by veteran banker Ken Moelis during the lead-up to the financial crisis, Moelis & Company (NYSE: MC) is an independent investment bank that provides strategic and financial advisory services to corporations, financial sponsors, governments, and sovereign wealth funds.
Why Does MC Catch Our Eye?
- Market share has increased this cycle as its 31.7% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 86.4% annual growth in its earnings per share outpaced its revenue
- Industry-leading 45% return on equity demonstrates management’s skill in finding high-return investments
At $71.34 per share, Moelis trades at 28x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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