1 Financials Stock to Keep an Eye On and 2 We Avoid

Financial providers use their expertise in capital allocation and risk assessment to help facilitate economic growth while offering consumers and businesses essential financial services. But worries about economic uncertainty and potential market volatility have kept sentiment in check, and over the past six months, the industry's 7.1% return has trailed the S&P 500 by 4.4 percentage points.

Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one resilient financials stock at the top of our wish list and two best left ignored.

Two Financials Stocks to Sell:

Donnelley Financial Solutions (DFIN)

Market Cap: $1.43 billion

Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE:DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.

Why Do We Think Twice About DFIN?

1. Annual sales declines of 3% for the past five years show its products and services struggled to connect with the market during this cycle

Donnelley Financial Solutions is trading at $53.78 per share, or 12.5x forward P/E. Dive into our free research report to see why there are better opportunities than DFIN.

FirstCash (FCFS)

Market Cap: $7.42 billion

Offering a financial lifeline to the unbanked and credit-constrained since 1988, FirstCash (NASDAQ:FCFS) operates pawn stores across the U.S. and Latin America while also providing retail point-of-sale payment solutions for credit-constrained consumers.

Why Are We Wary of FCFS?

1. Muted 6.9% annual revenue growth over the last two years shows its demand lagged behind its financials peers
2. Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 159% annually over the last five years

FirstCash’s stock price of $168.12 implies a valuation ratio of 17.2x forward P/E. Read our free research report to see why you should think twice about including FCFS in your portfolio.

One Financials Stock to Watch:

Capital One (COF)

Market Cap: $149 billion

Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE:COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses.

Why Are We Positive On COF?

1. Market share has increased this cycle as its 15.2% annual revenue growth over the last two years was exceptional
2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 44.9% annually, topping its revenue gains
3. Adequate return on equity shows management makes decent investment decisions

At $233.71 per share, Capital One trades at 11.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.