Financial institutions play a critical role, offering everything from consumer banking to wealth management and specialized financial solutions. But uncertainty about fiscal and monetary policy has tempered enthusiasm, limiting the industry's gains to 1.3% over the past six months. This return lagged the S&P 500's 7.1% climb.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here is one financials stock boasting a durable advantage and two best left ignored.
Two Financials Stocks to Sell:
Franklin Resources (BEN)
Market Cap: $16.13 billion
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Why Do We Think BEN Will Underperform?
- 5.4% annual revenue growth over the last five years was slower than its financials peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.6% annually
- ROE of 8% reflects management’s challenges in identifying attractive investment opportunities
Franklin Resources’s stock price of $31.02 implies a valuation ratio of 10.9x forward P/E. To fully understand why you should be careful with BEN, check out our full research report (it’s free).
Navient (NAVI)
Market Cap: $802.7 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 Steer Clear of NAVI?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 21.3% annually over the last five years
- Earnings per share have contracted by 15.9% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Debt-to-equity ratio of 18.9× is concerningly high, indicating excessive leverage that could limit financial flexibility
Navient is trading at $8.54 per share, or 11.8x forward P/E. Dive into our free research report to see why there are better opportunities than NAVI.
One Financials Stock to Buy:
StoneX (SNEX)
Market Cap: $9.66 billion
Originally known as INTL FCStone until its 2020 rebranding, StoneX Group (NASDAQ: SNEX) provides a global financial services network connecting companies, traders, and investors to markets through clearing, execution, and advisory services.
Why Should You Buy SNEX?
- Annual revenue growth of 44.3% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 29.6% annually over the last two years and trumped its peers
- Impressive 16.9% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
At $121.88 per share, StoneX trades at 3.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
