Fintech Stocks to Make Your Portfolio Shine
In 1950s, the launch of the Diners Club Card planted the seed of cashless payment in the society, though debit cards came in much later in 1966. Since then, in the last 70 years, cashless payment system has evolved radically. In recent years, the financial sector has leveraged technology making the availability of financial services easier.
Financial technology (aka Fintech) has perks that have attracted millions. Decades earlier, our ancestors would avoid banks, first to save themselves from the long queue and most importantly the massive paper work behind just opening an account. The evolution of technology now helps one to open an account in a few clicks, and transferring takes only a couple of seconds.
FinTech has truly disrupted the traditional financial services. Mobile payments, money transfers, loans, fund raising, and asset management are the prime focus of fintech. This has reduced the number of unbankers drastically.
Small fintech firms, which were born just a few years back, are booming as users multiply exponentially. In fact, as per CB Insights, fintech companies have raised around $51 billion from1,707 deals in 2018 and have surpassed $117 billion in 87 deals in the first half on 2019.
Why Fintech is Booming?
Imagine, you run a shop and you want to accept credit card payment from your customer, what would you do if you were in the same place 20 years back? You would have opened an account with a big credit card provider and set up bulky equipment and a landline. Standing today, you just need one or two things, an account in the electronic payment application (say PayPal, Venmoetc) and a card swiping machine.
The trend of scan and click has boosted fintech more. From paying electricity bills to buying a small ice cream, people of all age groups prefer to go “cash-less.” People prefer mobile applications for financial task as they can easily track transactions, global usability and instant offers in purchasing and let’s not miss out the “reward points.”
The year 2019 has so far seen the three largest deals in the history of fintech. In January, Fiserve acquired First Data for nearly $21.8 billion and Fidelity National Information Services acquired Worldplay for $35.3 billion. While Global Payments has purchased Total System Services for $26.2 billion in May.
What Future FinTech Holds?
From $930 million investment in 2008 to $51 billion in 2018, fintech has made its place in the world economy. As per reports from World Bank, “agrowing body of research reveals many potential development benefits from financial inclusion” especially from financial technology.
World Bank’s 2017 Global Findex Database cited that financial inclusion has helped people invest in their own businesses or farms, and spend more on education and nutritious food.
For instance, Square, Inc. SQ provides credit card reader technology that can be used by vendors in local farmer's market and food truck who cannot afford card acceptance services. In fact some of these fintech companies also provide additional services like micro-loan, customized point-of-sale platform and digital wallets.
With the “mobile app revolution” exploding the 21st century and people of every age preferring to use applications from everyday work, fintech has a huge role to play. Barring the time factor, fintech has also helped us gain better security. Artificial Intelligence is used by banks to access risks, while trading houses can easily spot manipulation.
Modern fintech software like Robo-advisor provides financial advice or investment management with minimal human intervention making trade projections unbiased.
Grab These 5 FinTech Stocks Now
With more and more people opting for cashless transactions and app revolution in banking and trading sectors, it is confirmed that fintech will be a valuable asset in your portfolio. We have narrowed down our search to Zacks Rank #1 (Strong Buy) and 2 (Buy).
Cardtronics plc CATM is a publicly traded company providing ATM services primarily in North America and Europe. The company acts as a convergence for retailers, financial institutions, prepaid card programs and customers.
Cardtronics’s expected earnings growth rate for the current year is 5.14%. The Zacks Consensus Estimate for the current-year earnings has improved nearly 8.2% over the past 60 days. The stock carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
PayPal Holdings, Inc. PYPL is a publicly traded technology platform company. The platform allows customers to pay and get paid, withdraw funds to their bank accounts and hold balances in their PayPal accounts in various currencies.
PayPal’s expected earnings growth rate for the current year is 29.3%. The Zacks Consensus Estimate for the current-year earnings has improved 4.7% over the past 60 days. The PayPal stock carries a Zacks Rank #2.
EVERTEC, Inc. EVTC is a publicly traded company that engages in transaction processing business primarily in Latin America and the Caribbean. The company’s expected earnings growth rate for the current year is 6.5%. The Zacks Consensus Estimate for the current-year earnings has improved 2.6% over the past 60 days. The Evertec stock carries a Zacks Rank #2.
PaySign, Inc. PAYS is a publicly traded company that provides prepaid card programs and processing services for corporate, consumer and government applications. The company’s expected earnings growth rate for the current year is 222.2%. The Zacks Consensus Estimate for the current-year earnings has improved 16% over the past 60 days. The PaySign stock carries a Zacks Rank #2.
Fiserv, Inc. FISV is a publicly traded company that provides information management systems and services to the financial and insurance industries. The company’s expected earnings growth rate for the current year is 18.7%. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the past 60 days. The Fiserv stock carries a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Click to get this free report
Cardtronics PLC (CATM): Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
Square, Inc. (SQ): Free Stock Analysis Report
Fiserv, Inc. (FISV): Free Stock Analysis Report
Evertec, Inc. (EVTC): Free Stock Analysis Report
3PEA international, Inc. (PAYS): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.