The S&P 500 Financials stock index produced a negative 3.11% return year to date through Friday, compared with a 13% gain for the S&P 500 as a whole.
But stocks/best-financial-services-companies-own-2023-edition”>17 Financial Services stocks made Morningstar’s list of the best stocks to own for 2023. All of the companies on that list have wide Morningstar moat ratings. That means the company believes they will have competitive advantages that will last at least 20 years.
Morningstar also says the companies have strong management teams, balance sheets and investments.
Here are 10 of the companies on the financial services list, listed in alphabetical order.
Credit Cards, Investments, Financial Exchange
1. American Express (AXP) – Get a free reportthe luxury credit card company
Morningstar Fair Value Estimate: $178. Monday price quote: $153.05.
“The company’s greatest strength remains its cardholder base of high-spending individuals and small businesses,” wrote Morningstar analyst Michael Miller.
“The high average spend rate of American Express cards makes their cardholders attractive to merchants, and the company has been able to form valuable partnerships in exchange for access to these cardholders.” Miller believes this trend will continue.
Related: Morningstar Just Named Three Top stocks ‘Dividend Aristocrats’
2. Berkshire Hathaway (BRK.B) – Get a free reportWarren Buffett’s investment group
Morningstar fair value estimate: $400. Monday’s quote: $347.15.
“Berkshire, due to its diversification and lower overall risk profile, offers one of the best risk-adjusted return profiles in the financial services sector,” wrote Morningstar analyst Greggory Warren. “And it remains a generally strong candidate for downside protection during market sell-offs.”
Furthermore, “it will be some time before the company finally succumbs to the impediments created by the size and scale of its operations,” he said.
3. CME (CME) – Get a free reportthe financial exchange operator
Morningstar Fair Value Estimate: $215. Monday Price Quote: $219.25.
“CME has a dominant position in many of the contracts traded on its exchange and is well diversified across multiple product lines,” Miller wrote.
“Over the long term, we anticipate the company will continue to benefit from secular growth in the need to hedge exposure to commodities, energy and interest rates. “CME also has a history of generating incremental growth by introducing new futures contracts.”
4. JPMorgan Chase (JPM) – Get a free reportthe financial services group
Morningstar Fair Value Estimate: $153. Monday Price Quote: $147.55.
5. Northern Trust (NTRS) – Get a free reporta trust bank
Morningstar Fair Value Estimate: $86. Monday quote: $68.70.
Data, banks, bond trading
6.S&P Global (SPGI) – Get a free reporta financial data provider
Morningstar Fair Value Estimate: $375. Monday Price Quote: $367.95.
7. Toronto-Domain (DT) – Get a free reporta canadian bank
Morningstar Fair Value Estimate: $69. Monday Price Quote: $59.65.
8. Tradeweb Markets (tw) – Get a free reporta bond trading platform
Morningstar Fair Value Estimate: $84. Monday quote: $84.05
9. US Bancorp (USB) – Get a free reportthe largest regional bank in the country
Morningstar Fair Value Estimate: $52. Monday price quote: $32.45.
10.Visa (V) – Get a free reportthe credit card company
Morningstar Fair Value Estimate: $241. Monday Price Quote: $239.90.
The author of this story owns shares of Berkshire Hathaway, CME, JPMorgan and US Bancorp.
