Digital innovations, such as blockchain and AI, are transforming financial services, enhancing efficiency and customer experience. Investors are particularly optimistic about companies that leverage these technologies for competitive advantage.
These are all blue-chip stocks that have great reputations, and I believe that investors will do well by adding them to their portfolios. So with that being said, here are three of the best financial services stocks for investors to consider. These companies won’t stay so attractively priced for long.
Charles Schwab (SCHW)
Charles Schwab (NYSE:SCHW) is a leading provider of financial services, offering a comprehensive range of wealth management, securities brokerage, and overall banking services.
In 2024, Charles Schwab received accolades from U.S. News & World Report and J.D. Power for its top-notch investment platforms, which I think makes it one of those smartest financial services stocks for investors.
SCHW reported $5.12 billion in revenue, up 9.5% year-over-year, with an EPS of 93 cents compared to 77 cents the previous year. Despite missing revenue expectations slightly, EPS exceeded estimates. Key metrics included $7580 billion in total client assets and $150.7 billion in net new client assets, both surpassing analyst estimates.
Looking ahead, Charles Schwab is positioned to continue its growth trajectory by focusing on expanding its customer base and enhancing its service offerings. Analysts anticipate that Schwab’s earnings will grow significantly in the coming year, with expectations for EPS to increase by 35.38% from $3.25 to $4.40 per share.
Goldman Sachs (GS)
Goldman Sachs (NYSE:GS) is a leading global investment banking, securities, and investment management firm. It provides a wide range of financial services to a substantial and diversified client base.
In Q1 2024, Goldman Sachs reported strong financial results with quarterly net revenues totaling $14.21 billion, and net earnings of $4.13 billion, translating to diluted earnings per share (EPS) of $11.58. Global Banking & Markets led performance with $9.73 billion in net revenues. Asset & Wealth Management contributed $3.79 billion in net revenues, achieving record Management and other fees. The firm also saw assets under supervision rise to a record $2.85 trillion.
Goldman Sachs continues to maintain a dominant position in the financial services industry by leveraging its extensive global network and diversified service offerings. This includes significant investments in technology to improve trading platforms and wealth management services.
GS is perhaps one of the most blue-chip stocks in the financial services industry, which makes it a strong pick for this article.
Morgan Stanley (MS)
Morgan Stanley (NYSE:MS) serves clients worldwide, including corporations, governments, institutions, and individuals, through three business segments: Institutional Securities, Wealth Management, and Investment Management.
The company reported robust financial performance, exceeding analyst expectations. The firm achieved a profit of $2.02 per share, surpassing the estimated $1.66 per share. Total revenue for the quarter rose to $15.14 billion from $14.5 billion a year ago. Investment banking revenue increased by 16% year-over-year, driven by strong equity underwriting which more than doubled in revenue. Fixed-income underwriting also performed well for the second consecutive quarter, supported by increased bond issuance.
Finally, CEO Ted Pick highlighted the firm’s achievement of managing $7 trillion in client assets across wealth and investment management.
Morgan Stanley has been actively expanding its footprint in Asia, particularly in China. The firm has increased its stake in its Chinese securities joint venture to 94%, aiming to capitalize on the growing financial markets in the region.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.