The fintech sector has rewarded many long-term investors. The industry is worth approximately $226.76 billion and is expected to achieve a compounded annual growth rate (CAGR) of 16.8% from now until 2032.
In fact, corporations in the industry offer essential financial products and services. Loans make properties, cars and other resources more accessible to consumers. Credit and debit cards make it easier to buy goods and services while offering additional perks. Budgeting tools help people master their personal finances and get closer to their long-term goals.
Many fintech companies are listed on the stock market, but not all of them are good buys. These are some of the top fintech stocks that are separating themselves from the competition.
American Express (AXP)
The highly-esteemed American Express (NYSE:AXP) offers enticing value for long-term investors. The fintech company has been expanding its profit margins and has a multi-year plan to grow revenue and earnings per share. The company announced in its Q4 2023 report that it plans to achieve 9% to 11% revenue growth along with EPS growth in the mid-teens beyond 2026.
Also, the financial firm lived up to those benchmarks in Q4 2023. Revenue increased by 11% year-over-year (YOY) and net income jumped by 23% YOY. Full-year revenue and diluted EPS were both up by 14% YOY.
Moreover, AXP added 12.2 million new cards this year which brings the total cards-in-force to more than 140 million. The company’s card base is growing, which should translate into elevated revenue and net income in the years to come.
Also, the company announced that it would raise its quarterly dividend from $0.60 to $0.70 per share, which is a 17% increase. Currently, American Express stock has a 1.28% yield and a 19.5 P/E ratio.
Nu Holdings (NU)
The rapidly growing digital banking platform Nu Holdings (NASDAQ:NU) is in Mexico, Central America and South America.
More people are turning to the firm for their banking and investing needs. The company added 4.8 million new customers in Q4 2023 and an additional 19.3 million customers for full-year 2023. Those additions brought the company’s total number of customers to 93.9 million. Also, 83% of its customers were active at the end of the quarter.
Profit margins continue to soar. The financial institution reported $58.0 million in net income in Q4 2022. Meanwhile, it generated $360.9 million in net income in Q4 2023. Revenue increased by 57% YOY to reach a new record high of $2.4 billion.
Finally, company’s portfolio of credit card and personal loans grew by 61% YOY while deposits jumped by 50% YOY. The impressive growth rates across the board explain why the stock has outperformed broader indices. NU shares are up by 39% year-to-date (YTD), more than doubling over the past year. And, although the stock doesn’t receive much coverage, it’s rated as a strong buy among four analysts with some upside still in the cards.
Visa (V)
Established in 1958, Visa (NYSE:V) is the leading credit and debit card company and is approaching a $1 trillion market cap. It’s possible for the company to reach that milestone by the end of the decade. And, analysts are encouraged about the company’s prospects.
Additionally, the stock boasts a strong buy rating from 26 analysts and has a projected 12% upside. Recent price target hikes suggest the stock can gain more than 12% with the highest price target at $335. Visa stock has to gain more than 20% to reach that price point.
It’s easy to see why analysts feel good about the stock. Recently, Visa posted 9% YOY revenue growth and 20% GAAP EPS growth in the first quarter of fiscal 2024. Also, V put $4.4 billion to work via share repurchases and dividends. The profit margin came in at 56.64% for the quarter. Visa is keeping up with the market with a 7% YTD gain.
On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.