Fintech innovators with an upside. Technology stocks have received high ratings throughout the pandemic. But now, given the threat of…
Fintech innovators with an upside.
Technology stocks have received high ratings throughout the pandemic. But now, given the risk of higher interest rates and rising inflation, investors may not be willing to pay the same premium for these companies. That’s why the high-growth names in the IT sector have been sold off lately. Investors taking a long-term approach, though, may choose to bet on the transformation that fintech, or fintech, is bringing to businesses: the digitization of money, online payments, online and non-banking banking, and easy access to credit. If you want to know how to get a piece of these disruptive initiatives, here are seven of the best fintech stocks to consider.
Block Inc. (Pointer: SQ)
With a market capitalization of $65 billion, Block is a major player in the digital payments space. Block, until recently known as Square, attracts a wide range of customers, from small operations to large companies with more complex transactions. Block is also focusing on global expansion, entering into new markets including the UK, Australia, Canada and France. As contactless payments become more prevalent in the era of COVID-19, Block is well positioned to remain a leader in this growing ecosystem of digital transactions. Block is highly exposed to cryptocurrencies. Spiral subsidiary Spiral builds and funds Bitcoin projects. “The recent change in the company’s name represents a shift in focus from a pure payments company to a broader and more diversified fintech innovator looking to expand its presence in crypto,” says David Miller, portfolio manager at Strategy Shares Halt Climate Change ETF (NZRO).
PayPal Holdings Inc. (PYPL)
PayPal has been at the forefront of digital payments for more than two decades. Its platform includes more than 400 million consumers and merchants in more than 200 markets globally. Logan Burke, senior research analyst at Edward Jones, describes PYPL as a pure bet on continued e-commerce growth. “It’s hard to find other such stocks abroad,” he says. In 2022, PayPal Pay With Venmo is launching on the Amazon.com Inc. platform. (AMZN). The partnership comes as online buying activity has spiked during the pandemic, with 47% of Venmo users expressing an interest in paying with Venmo at checkout with merchants, according to Venmo’s Behavior Study 2020. “They will likely continue to offer a growth algorithm,” Burke says. Their long-term portfolio, which represents 20% plus growth, which we believe over time leads to fairly attractive returns for shareholders.” “Paypal continues to expand its services such as peer-to-peer payments, Venmo, crypto and buy now, and pay later,” which are increasing its footprint in global digital payments.
Visa Corporation (V)
Consumer payments giant Visa is also a leader in digital payments, making it an excellent place for our list of the best fintech stocks to buy. Visa expanded its reach to more than 80 million merchants, a 14% increase in fiscal 2021, according to the company’s 2021 shareholder letter. David Trainer, CEO of New Constructs, a Nashville-based investment research firm, says: “We are optimistic about Visa, which It has a strong business with a wide moat that makes it difficult for competitors to match Visa’s ingenuity.” The credit card giant is also investing heavily to continue its growth in digital payments. Over the past five years, the company has invested more than $9 billion in technology to ensure its users are confident to spend digitally. Compared to other names in the fintech space, Trainer says, Visa shares are valuated much lower, with a forward price-to-earnings ratio of around 25. He also points to Visa’s high return on invested capital, or ROIC, a measure that shows a company’s return on all The cash invested in the business. “It’s hard to find a stock with a high ROIC in the fintech space,” Trainer says.
Intuit Inc. (INTU)
Intuit, the tax and accounting software company, is on the list of the best fintech stocks to buy for 2022 due to its solid customer base and exponential growth. The company’s revenue grew to $2 billion in the fourth quarter from $1.3 billion a year earlier, and it expects nearly $12 billion in sales for 2022, a growth forecast of 26% to 28%. The technology platform has a suite of services including TurboTax, QuickBooks, Mint, Credit Karma, and Mailchimp. Burke says Intuit’s more recent acquisitions, such as Credit Karma and Mailchimp, have led to strong growth and a more complete platform for small and medium-sized businesses. “It’s a compelling market they are hooked into that is going to drive some fairly strong growth in earnings over the next several years,” he says.
Upstart Holdings Inc. (UPST)
Upstart is an AI-powered lending platform that partners with banks to improve access to affordable credit. According to its latest earnings report, the company has more than tripled its revenue, earnings and the number of banks and credit unions on its platform since its initial public offering last year. In the third quarter of 2021, the company recorded revenue growth of 250% over the previous year. Upstart has been accelerating its partnerships with car dealerships as it seeks to increase its transaction volume. Although the stock is far from its 2021 highs, UPST is still up more than 100% in the past year.
Robinhood Markets Inc. (HOOD)
Robinhood, the brokerage that has revolutionized the retail investment landscape, has over 22 million funded accounts and over 18 million monthly active users, earning it a spot on our list of the best fintech stocks to buy. While the brokerage has come under scrutiny for the pay-to-order flow model, there are many things we should look forward to from Robinhood, such as retirement account offerings, expanded access to cryptocurrencies, direct customer support, the option for recurring investment and a feature that allows investors transfer of their offshore accounts. These initiatives may improve retail investor participation in the stock market and continue to grow Robinhood’s user base.
Amazon.com Corporation (AMZN)
Amazon is far from just a fintech stock, but it earns a spot on this list because it has partnered with big players in the field. Amazon is the largest e-commerce company in the world, where customers have become comfortable with digital and cashless transactions. AMZN has announced a partnership with Affirm Holdings Inc. (AFRM) to gain a foothold in the buy now, pay later market. This payment option will provide more flexibility to eligible customers. This marks the e-commerce giant’s first partnership with the premium program and is an indication that this payment option will continue to thrive. Amazon is partnering with other fintech stocks, including Block and Intuit, who are building their own buy now, pay later business models.
7 Fintech stocks to buy in 2022:
– Block Inc (SQ)
– PayPal Holdings Inc. (PYPL)
– Visa Company (V)
Intuit Inc. (INTU)
– Upstart Holdings Inc. (UPST)
Robinhood Platforms Company (HOOD)
– Amazon.com Corporation (AMZN)
More US news
Top 7 Monthly Dividend Stocks to Buy Now
How to invest in stocks for beginners
Top 7 Vanguard Funds for Novice Investors
7 of the Best FinTech Stocks to Buy in 2022 Originally appeared usnews.com