Fintech stocks have undoubtedly seen a good year. With quarantine measures getting stricter in parts of the world, more people are forced to stay home. As a result, many consumers find themselves using digital payments more often. Contactless payment fits perfectly into the new norm which involves social distancing. In line with this, businesses are rushing to adopt this new payment method in order to stay ahead of the competition. This could be part of the reason why top fintech stocks have seen a surge in the stock market this year.
Fintech companies like Mastercard (MA Stock Report) and Visa (V Stock Report) have recovered tremendously since the stock market slide in March. Large companies like Target (TGT Stock Report), Amazon (AMZN Stock Report), and Costco (COST Stock Report) have seen massive returns on their e-commerce fronts. This places the fintech stocks in an interesting position. After all, online commerce requires digital payment facilitators to function smoothly. Therefore, fintech stocks are bound to follow e-commerce trends closely. With this in consideration, could these top fintech stocks be worth looking into this month?
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The first fintech stock on this list is Fiserv (FISV Stock Report). The global provider of financial services technology is based in Wisconsin. Fiserv is no newcomer to the fintech industry as it has been around since 1984. It is also a member of the S&P 500 and Fortune 500 and is among Fortune’s World’s Most Admired Companies in 2020. The company’s clients include banks, thrifts, credit unions, securities broker-dealers, leasing and finance companies, and retailers. The stock has risen by over 10% this month alone.
The company reported a stellar third-quarter fiscal with a 79% year-over-year increase in revenue. It also saw a 19% increase in adjusted earnings per share (EPS) from the previous quarter and an operating cash flow increase of 83% year to date. Safe to say, Fiserv appears to be extremely satisfied with their recent quarter performance. This is clear as the company has raised its full-year 2020 adjusted EPS to an 11% increase from 2019. Its 27% increase in third-quarter sales results is a likely contributor to this success.
Fiserv announced the launch of Card Expert earlier this week. Card Expert is a business intelligence platform that enables financial institutions to optimize their card portfolio. This is done by harnessing market intelligence along with business and cardholder data. Essentially the platform does all the initial analytical work and presents companies with clear and comprehensive consumer data. With Card Expert, financial institutions have access to an overview of their businesses. This encompasses key factors such as debit and credit transaction data, mobile app and ATM usage, and risk management. Furthermore, the platform offers dashboard galleries and customizable views of critical trends and key metrics. This reportedly removes the ‘guesswork’ from portfolio optimization. With its innovative product offerings, would you add FISV stocks to your watchlist?Best Fintech Stocks To Buy In The Final Quarter Of 2020: Square Inc.
Square (SQ Stock Report) is a San Francisco based financial and merchant services aggregator, and mobile payment company. The company makes software and hardware payments products and has recently expanded into small business services. The benefits of this move are apparent as the company has seen an amazing year-to-date gain of 194%. The key drivers for this growth would be Square’s Cash App and Seller ecosystem. Cash App is a readily available app that is used to make quick cash transfers between users and facilitates cash transactions with businesses. The company’s Seller ecosystem is a series of payment solutions focused on Business-to-Customers (B2C) transactions. It mostly involves payments that are done via a swipe, a dip, or tap of a card.
In its third-quarter fiscal, the company reported a gross profit gain of 59% year-over-year. The company’s “Seller” ecosystem is a key aspect of this growth as it generated more than half of the gross profit. Furthermore, the company reports a 46% increase in international gross payment volume for Seller, year-over-year. Cash App is also a key contributor to the amazing quarter seen by Square. The app saw a gross profit rise of 212% compared to a year earlier. With these two robust sources of revenue, it is no wonder that Square is flourishing now.
The company has also announced a collaboration with Italy’s Satispay on its European expansion. This is an amazing play by Square as Satispay is Italy’s leading provider of mobile payment services with annual transaction volumes of up to $407 million. Satispay reports a 78% rise in transaction volumes over the last year. This appears to be a fine investment on Square’s part. Will it be enough to put SQ stock ahead of the competition?Best Fintech Stocks To Buy In The Final Quarter Of 2020: PayPal Holdings Inc.
Last on this list is PayPal (PYPL Stock Report). The California based company operates a worldwide online payments system. It facilitates online money transfers and serves as an electronic alternative to traditional methods. This is a key factor in the company’s meteoric rise this year. As most fintech stocks saw massive losses in March, PayPal performed much better than its competitors. The company’s share price is up by 75% year-to-date.
The company saw an all-time high growth in total payment volume in its third-quarter fiscal earlier this month. It also reported a 25% rise in net revenues and an incredible 121% increase in EPS compared to a year earlier. CFO John Rainey attributes this success to PayPal’s diversified platform, business scalability, and earnings power. Moving forward, CEO Dan Schulman mentioned that the company will be looking to create a “compelling and expansive digital wallet that embraces all forms of digital currencies and payments.” This would likely add to the growing momentum of the company in the months to come.
In recent news, PayPal is launching its “Generosity Network”. This is essentially the company’s GoFundMe-esque service that allows users to launch fundraising campaigns. Amid the coronavirus pandemic, many are struggling to make ends meet. On the Generosity Network, PayPal users will be able to contribute to people or causes in the form of direct cash transfers and credit card rewards. This wholesome service admirably stands to benefit those facing dire situations in these times. PayPal could also benefit from this as the Generosity Network incentivizes more people to use its services. With all things considered, should investors be watching PYPL stocks this week?