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 has tumbled by 7.1%. This drawdown is a noticeable divergence from the S&P 500’s 6.6% return.
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. On that note, here are three financials stocks we think can generate sustainable market-beating returns.
Synchrony Financial (SYF)
Market Cap: $23.86 billion
Powering over 73 million active accounts and partnerships with major brands like Amazon, PayPal, and Lowe's, Synchrony Financial (NYSE:SYF) provides credit cards, installment loans, and banking products through partnerships with retailers, healthcare providers, and digital platforms.
Why Will SYF Outperform?
- Share buybacks catapulted its annual earnings per share growth to 33%, which outperformed its revenue gains over the last two years
- Impressive 17.4% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
- Industry-leading 22.8% return on equity demonstrates management’s skill in finding high-return investments
At $68.70 per share, Synchrony Financial trades at 7.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
EVERTEC (EVTC)
Market Cap: $1.75 billion
Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE:EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.
Why Is EVTC a Good Business?
- Annual revenue growth of 15.8% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings per share have outperformed the peer group average over the last two years, increasing by 13.1% annually
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
EVERTEC’s stock price of $28.35 implies a valuation ratio of 7.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
American Express (AXP)
Market Cap: $211.1 billion
Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE:AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.
Why Should You Buy AXP?
- Impressive 16.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Share buybacks catapulted its annual earnings per share growth to 32.6%, which outperformed its revenue gains over the last five years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
American Express is trading at $306.95 per share, or 17.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as
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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.