The financial stocks are expected to perform better in 2021.
Since the evolution of the internet, the financial sector has grown and has become a much bigger and enhanced marketplace for payments and other financial services. Banks that are the bigger part of this industry haven’t had a good time in 2020, whereas, online banking services and payment firms have made gains.
Analysts see financial stocks making a sharp rebound in 2021 and beyond with things getting better—in the longer run. But an investment in the market’s best financial stocks could pay off handsomely this year. So, let’s have a look at the three best financial stocks for investment in 2021.
Goldman Sachs (GS)
Goldman Sachs (GS) is one of the market leaders and is a strong financial firm that has some impeccable operations. The company has performed quite well compared to the rest of the industry firms.
During the full-year 2020, the company remained focused on serving clients and executing strategic priorities and generated net revenues of $44.56 billion, up by 22% year-over-year. This marked the highest annual net revenues in 11 years, which is quite an achievement. While the diluted EPS was $24.74, the second-highest EPS reported by the company in its history.
Goldman Sachs (GS) is well on track and this year things are expected to grow with continuous momentum. So, GS stock is for sure one of the best investment options in the financial sector.
Nelnet (NNI) is a US-firm that deals in the administration and repayment of student loans and education financial services. Nelnet has been one of the top performers in the financial sector during the past year.
As of the third quarter, the Company recorded GAAP net income of $71.5 million, which was higher than the prior year’s net income of $33.2 million. The increase in net income was primarily driven by the rise in loan spread and the recognition of a negative provision for loan losses during Q3 on Nelnet’s loan portfolio. Moreover, the company gained recognition from the sale of consumer loans.
The company is continuing to perform well and has been making some strategic collaborations. The best part is that they have received customer-focused responses from their operating businesses during the pandemic, which has really boosted things up. In the long-term, the launch of Nelnet Bank and third-party investment received by ALLO will play a massive role in the firm’s growth. So, NNI is another prominent stock for investment.
Credit Acceptance (CACC)
Credit Acceptance (CACC) is an auto finance company that provides automobile loans and other related financial products. CACC operates its financial program via a network of national dealer-partners and the automobile dealers’ part of its programs.
In the last quarter report, the company reported a net income of $166.3 million during Q4 2020, compared to $161.9 million in 2019. Whereas, for the full-year, the company recorded a net income of $421 million, on a lower side from last year which was $656.1 million.
Recently, the company completed a $500 million asset-backed non-recourse secured financing. The company will use this financing to repay outstanding indebtedness. Earlier this year, Credit Acceptance completed similar financing worth $100 million.
Credit Acceptance (CACC) shares have been on the downward side since mid-2020. However, with improvement in the Q4 results, thereis much upside expected as we head forward.