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 5.1% over the past six months. This return lagged the S&P 500’s 12.8% climb.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here are two financials stocks we think can generate sustainable market-beating returns and one we would avoid.
One Financials Stock to Sell:
Navient (NAVI)
Market Cap: $854.4 million
Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ: NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services.
Why Do We Pass on NAVI?
- Sales tumbled by 21.6% annually over the last five years, showing market trends are working against it during this cycle
- Earnings per share have dipped by 15.7% annually over the past five years, which is concerning because stock prices follow EPS over the long term
At $9.10 per share, Navient trades at 11.9x forward P/E. Read our free research report to see why you should think twice about including NAVI in your portfolio.
Two Financials Stocks to Watch:
Hamilton Lane (HLNE)
Market Cap: $3.67 billion
With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ: HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.
Why Is HLNE a Top Pick?
- Annual revenue growth of 19.6% over the last five years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were more profitable, as its annual earnings per share growth of 20.5% outpaced its revenue gains
Hamilton Lane is trading at $85.75 per share, or 12.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
American Express (AXP)
Market Cap: $208.1 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 Does AXP Stand Out?
- Annual revenue growth of 13.2% over the last five years beat the sector average and underscores the unique value of its offerings
- Earnings growth was above the peer group average over the last five years as its EPS compounded at 13.9% annually
- Industry-leading 33% return on equity demonstrates management’s skill in finding high-return investments
American Express’s stock price of $308.43 implies a valuation ratio of 16.5x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
