Financial institutions play a critical role, offering everything from consumer banking to wealth management and specialized financial solutions. But uncertainty about fiscal and monetary policy has tempered enthusiasm, limiting the industry’s gains to 3.3% over the past six months. This return lagged the S&P 500’s 7.2% climb.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here are two financials stocks we think can generate sustainable market-beating returns and one we’re steering clear of.
One financials stock to sell:
Atlanticus Holdings (ATLC)
Market cap: $1.42 billion
Using data analytics to serve the millions of Americans with less-than-perfect credit scores, Atlanticus Holdings (NASDAQ: ATLC) provides technology and services that help lenders offer credit products to consumers often overlooked by traditional financing providers.
Why Are We Cautious About ATLC?
- Flat earnings per share over the last four years lagged its peers
- High net-debt-to-EBITDA ratio of 28× could force the company to raise capital on unfavorable terms if market conditions deteriorate
Atlanticus Holdings is trading at $93.44 per share, or 8.5x forward P/E. To fully understand why you should be careful with ATLC, check out our full research report (it’s free).
Two financials stocks to buy:
Happen Bank (HAPN)
Market cap: $1.79 billion
Pioneering peer-to-peer lending in the US before evolving into a digital bank, Happen Bank (NASDAQ: HAPN) operates a marketplace that connects borrowers with lenders, offering personal loans, auto refinancing, and banking services.
What Makes HAPN Stand Out?
- Annual revenue growth of 17.6% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 96.5% annually, topping its revenue gains
- Management team has demonstrated it can invest in profitable ventures through its 12.1% five-year return on equity
Happen Bank’s stock price of $15.54 implies a valuation ratio of 7.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Tradeweb Markets (TW)
Market cap: $25.62 billion
Founded in 1996 as one of the pioneers in electronic bond trading, Tradeweb Markets (NASDAQ: TW) builds and operates electronic marketplaces that connect financial institutions for trading across rates, credit, equities, and money markets.
Why Do We Love TW?
- Annual revenue growth of 18.2% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last five years have been more profitable as its earnings per share increased by 20.5% annually, topping its revenue gains
At $122.53 per share, Tradeweb Markets trades at 26x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks we like even more
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
