2024 Financial Sector Outlook: Three Stocks to Consider Now

Many financial stocks struggled during 2022 and 2023 due to inflation, rising interest rates, geopolitical conflicts, and other macroeconomic pressures. However, some stabilization was observed in 2024 following three interest rate cuts by the Federal Reserve.

This year, further rate reductions are anticipated, with the Fed expected to lower rates at least two more times. While the financial sector might still encounter unpredictable challenges from tariffs and ongoing geopolitical tensions, investing in a few resilient stocks now can be a wise long-term strategy.

Where to invest $1,000 right now? Our analyst team just revealed the 10 best stocks to consider. Learn More »

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If you have $200 to invest, consider starting with fractional shares of these three resilient financial stocks: S&P Global (NYSE: SPGI), American Express (NYSE: AXP), and Nu Holdings (NYSE: NU).

1. S&P Global

S&P Global is a provider of financial data, credit ratings, and analytical services to all Fortune 100 companies and 80% of Fortune 500 companies. Its platform is utilized widely by banks, insurance firms, corporations, universities, and institutional investors. Recently, the company has integrated artificial intelligence (AI) tools, including its Spark Assist generative AI co-pilot, to enhance efficiency.

Between 2019 and 2024, the company’s revenue experienced a compound annual growth rate (CAGR) of 16%, while its earnings per share (EPS) grew at a CAGR of 8%. Notably, its profits faced a temporary decline in 2022 and 2023, mainly due to rising interest rates that impacted debt offerings, as well as the divestiture of its engineering solutions business in 2023.

Looking ahead to 2024-2027, analysts predict revenue and EPS to grow at a CAGR of 7% and 14%, respectively. These improvements are expected as interest rates decline and organizations adopt AI-powered tools for decision-making. While the stock appears pricey at 38 times this year’s earnings, its solid business model and consistent growth validate its valuation.

2. American Express

Unlike its competitors, Visa and Mastercard, American Express has a unique position as a bank and card issuer that processes payments with its own balance sheet. This model allows the company to only issue cards to higher-income, low-risk customers, helping shield it from economic downturns.

American Express is also less vulnerable to interest rate fluctuations; increased rates elevate its banking segment’s net income while lower rates encourage more consumer spending. Between 2019 and 2024, its revenue and EPS enhanced at a CAGR of 10% and 12%, respectively, despite various economic challenges. For 2024-2027, analysts expect revenue to rise at a CAGR of 8% and EPS at 12%. The stock still appears to be a bargain at 19 times this year’s earnings.

3. Nu Holdings

Based in Brazil and operating in Mexico and Colombia, Nu Holdings is recognized as the largest digital-only bank in Latin America. The customer base soared from 33.3 million at the end of 2021 to 114.2 million by 2024, with the activity rate increasing from 76% in 2021 to 83% in 2024.

From 2021 to 2024, Nu’s revenue skyrocketed at a CAGR of 89%. The company became profitable in 2023, and its net income almost doubled in 2024. This rapid expansion is attributed to the enhancement of services such as checking accounts, credit cards, loans, insurance, investment options, and e-commerce capabilities via the Nu Shopping app.

With over 70% of Latin America’s population still unbanked, Nu’s growth potential remains immense. Analysts expect its revenue and EPS to grow at a CAGR of 29% and 38%, respectively, from 2024 to 2026, making the stock attractive at just 21 times this year’s earnings.

Potential Investment Opportunities Await

Have you ever felt like you missed out on investing in successful stocks? If so, you’re not alone.

Occasionally, our expert analysts release a “Double Down” Stock recommendation for companies on the verge of significant gains. If you’ve been hesitant about investing, now may be the right time, as the performance numbers justify any concerns:

• Nvidia: An investment of $1,000 when we doubled down in 2009 would now be worth $311,551!*
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• Netflix: If you invested $1,000 in 2004, it would have grown to $519,375!*

Currently, we are issuing “Double Down” alerts for three exceptional companies with potential future gains, and opportunities like this may not arise again soon.

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*Stock Advisor returns as of February 28, 2025

American Express is an advertising partner of Motley Fool Money. Leo Sun holds no position in any of the mentioned stocks. The Motley Fool has positions in and recommends Mastercard, S&P Global, and Visa while recommending Nu Holdings as well. The Motley Fool adheres to a disclosure policy.

The views and opinions expressed herein belong to the author and do not necessarily reflect those of Nasdaq, Inc.