Financial-sector investors could be in for another year of outperformance. These 12 financial stocks have the best prospects for 2022, say Wall Street's pros.
The financial sector was one of the S&P 500's big
winners in an outstanding year for equities. And market strategists believe
many of the best financial stocks to buy for 2022 will be those carrying
red-hot momentum over from 2021.
In 2021, financial stocks delivered a total return (price
appreciation plus dividends) of 32% with just a few days left in the year. Only
energy (+46%), real estate (+37%) and information technology (+33%) delivered
superior returns. (For context, the S&P 500's total return for 2021 came to
+28% through Dec. 23.)
Rising interest rates – which benefit everything from banks'
net interest margins to insurance companies' fixed-income holdings – an
accelerating global economic recovery and moderating inflationary pressures are
just a few of the tailwinds at the financial sector's back in 2022, analysts
say.
Be that as it may, not all financial stocks are created
equal. A rising tide might lift all boats, but some sector names are forecast
to be more buoyant than others. So we turned to Wall Street analysts to find
the best financial stocks in the S&P 500 to buy for 2022, using data from
S&P Global Market Intelligence.
Here's how the ratings system works: S&P surveys
analysts' stock calls and scores them on a five-point scale, where 1.0 equals a
Strong Buy and 5.0 is a Strong Sell. Scores between 3.5 and 2.5 translate into
Hold recommendations. Scores higher than 3.5 equate to Sell ratings, while
scores equal to or below 2.5 mean that analysts, on average, rate a stock as
being a Buy. The closer a score gets to 1.0, the stronger the Buy
recommendation.
From regional banks to multiline insurance firms to massive
asset managers, the following 12 names rank as Wall Street's best financial
stocks to buy for 2022.
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