Investing in financial stocks requires good instinct and a lot of calculations, as this sector is very dynamic and stocks move fast. Investing in financial stocks also requires intuitive skills as well. In the following article, I will hone in on five financial stocks to find the best investment opportunities in this sector. I chose these five stocks because they are capitalizing on key positive drivers such as strong financials. Yet, they are all facing stiff headwinds such as a lagging real estate market, disappointing quarterly earnings results, and pressure from competitors. Here is what I found:
NYSE Euronext (NYX, Financial): The market capitalization at this price is close to $8 billion and the current price falls in the 52-week trading range of $22 and $42 per share. Earnings per share (EPS) are above $2 and the dividend yield is close to 4%. The price-to-earnings (P/E) ratio is more than 58. A beta of 1.63 depicts that it is a bit risky to invest in this stock but a rating of 7 out 10 has been given to it by industry experts and analysts. The debt-to-equity ratio is 0.31 and the net profit margin is close to 13% with positive trends in income growth. The NYX shares were under pressure due to the possibility of a merger. However, it has been reported that the deal will no longer be taking place. 2011 has been a good year for the company according to its CEO and there are chances of high levels of growth in this quarter and the next. This is why I believe it would be a good option to buy this stock.
XL Group PLC (XL, Financial): This stock is currently trading in the market at a price of close to $20 per share. Analysts and experts are predicting that the prices might rise. This price falls in the middle of the 52-week trading range of $18 and $25 approximately. The market capitalization of the XL stock is more than $6 billion for the current price. Earnings per share are close to $2 and the dividend yield is nearly 3%. Price-to-earnings ratio (P/E) ratio is 11 for this stock. XL stocks have a high beta of 2.45 which signify a higher risk and the income growth is somewhat stagnant. The Q4 reports from 2011 have shown that the XL stocks had reported a loss of approximately $2 per share. The company had suffered net losses overall and that had affected the share price as well. FBR Capital has revised the price targets for this company from $28 to $26 in this quarter and predicts that there might be a hike in share prices soon. With prospects of growth and better stability, this can be a good option to consider in my opinion for a diversified portfolio.
Piedmont Office Realty Trust Inc. (PDM, Financial): This particular stock is trading in the market currently at an approximate price of $18 per share. Some analysts predict that the prices will remain unchanged while others believe they will increase. The 52-week trading range for this stock is between $15 and $21 per share. Market capitalization at the current price is $3 billion. Dividend yield is close to 7% and dividends are paid at a rate of 0.32. Industry experts believe that this would be an ideal stock to buy in order to create a diverse portfolio.
The PDM stock has also been categorized as one of the highest yielding real estate stocks for the last quarter. It offer high returns to investors consistently. Future growth prospects are brighter too with the possibility of capital gains as well once the prices rise. In my opinion, this stock is one of the best options to invest in considering its position in the market and future growth.
Endurance Specialty Holdings Ltd. (ENH, Financial): In the current market scenario this stock is trading at a price of nearly $40 per share. Market capitalization at this price is close to $2 billion and the 52-week trading range is between $32 and $51 per share approximately. The earnings per share are more than $6 and the dividend yield is more than 3%. The price-to-earnings (P/E) ratio is above 6 and the stock has a beta of 0.76 which means that it is a safer investment relatively. Debt-to-equity ratio is 0.20 which is a good sign. However, prices are predicted to fall as the net profit margin seems to be shrinking and so is the income growth. The ENH stock was being categorized as one of the best options which investors were considering for income and growth in 2011. But the scenario changed in this quarter as prices are showing a downward trend. In more recent news, investors prefer to buy stocks of competitors for better returns and growth possibilities. In my opinion, it better to avoid investing in this stock right now. It is better to wait and see what changes in stock prices take place and then make a decision.
Brandywine Realty Trust (BDN, Financial): This stock is currently trading in the market at an approximate price of $11 per share. Most of the industry experts and analysts are of the opinion that prices of this stock will remain unchanged for a while. The 52-week trading range for this stock is between $7 and $13 per share approximately and the market capitalization at this price is close to $2 billion. The dividend yield is close to 6% but the beta is 2.22 which depicts that it has higher risk associated with it. The debt-to-equity ratio is 1.28 which is considerably well managed along with a positive growth trend in income. The profit margins are shrinking on the other hand. However, some experts and analysts have even given this stock a rating of 10 out of 10. At the start of this quarter, this stock was categorized as one of the stocks with a low price-to-earnings (P/E) ratio. According to the reports coming in, BDM stocks are a good investment for those who believe in the recovery of real estate in the U.S. Judging by the growth trends in the U.S. real estate sector, I believe that this stock is worth considering for investment purposes. There is a chance that this stock might offer capital gains in the future.
NYSE Euronext (NYX, Financial): The market capitalization at this price is close to $8 billion and the current price falls in the 52-week trading range of $22 and $42 per share. Earnings per share (EPS) are above $2 and the dividend yield is close to 4%. The price-to-earnings (P/E) ratio is more than 58. A beta of 1.63 depicts that it is a bit risky to invest in this stock but a rating of 7 out 10 has been given to it by industry experts and analysts. The debt-to-equity ratio is 0.31 and the net profit margin is close to 13% with positive trends in income growth. The NYX shares were under pressure due to the possibility of a merger. However, it has been reported that the deal will no longer be taking place. 2011 has been a good year for the company according to its CEO and there are chances of high levels of growth in this quarter and the next. This is why I believe it would be a good option to buy this stock.
XL Group PLC (XL, Financial): This stock is currently trading in the market at a price of close to $20 per share. Analysts and experts are predicting that the prices might rise. This price falls in the middle of the 52-week trading range of $18 and $25 approximately. The market capitalization of the XL stock is more than $6 billion for the current price. Earnings per share are close to $2 and the dividend yield is nearly 3%. Price-to-earnings ratio (P/E) ratio is 11 for this stock. XL stocks have a high beta of 2.45 which signify a higher risk and the income growth is somewhat stagnant. The Q4 reports from 2011 have shown that the XL stocks had reported a loss of approximately $2 per share. The company had suffered net losses overall and that had affected the share price as well. FBR Capital has revised the price targets for this company from $28 to $26 in this quarter and predicts that there might be a hike in share prices soon. With prospects of growth and better stability, this can be a good option to consider in my opinion for a diversified portfolio.
Piedmont Office Realty Trust Inc. (PDM, Financial): This particular stock is trading in the market currently at an approximate price of $18 per share. Some analysts predict that the prices will remain unchanged while others believe they will increase. The 52-week trading range for this stock is between $15 and $21 per share. Market capitalization at the current price is $3 billion. Dividend yield is close to 7% and dividends are paid at a rate of 0.32. Industry experts believe that this would be an ideal stock to buy in order to create a diverse portfolio.
The PDM stock has also been categorized as one of the highest yielding real estate stocks for the last quarter. It offer high returns to investors consistently. Future growth prospects are brighter too with the possibility of capital gains as well once the prices rise. In my opinion, this stock is one of the best options to invest in considering its position in the market and future growth.
Endurance Specialty Holdings Ltd. (ENH, Financial): In the current market scenario this stock is trading at a price of nearly $40 per share. Market capitalization at this price is close to $2 billion and the 52-week trading range is between $32 and $51 per share approximately. The earnings per share are more than $6 and the dividend yield is more than 3%. The price-to-earnings (P/E) ratio is above 6 and the stock has a beta of 0.76 which means that it is a safer investment relatively. Debt-to-equity ratio is 0.20 which is a good sign. However, prices are predicted to fall as the net profit margin seems to be shrinking and so is the income growth. The ENH stock was being categorized as one of the best options which investors were considering for income and growth in 2011. But the scenario changed in this quarter as prices are showing a downward trend. In more recent news, investors prefer to buy stocks of competitors for better returns and growth possibilities. In my opinion, it better to avoid investing in this stock right now. It is better to wait and see what changes in stock prices take place and then make a decision.
Brandywine Realty Trust (BDN, Financial): This stock is currently trading in the market at an approximate price of $11 per share. Most of the industry experts and analysts are of the opinion that prices of this stock will remain unchanged for a while. The 52-week trading range for this stock is between $7 and $13 per share approximately and the market capitalization at this price is close to $2 billion. The dividend yield is close to 6% but the beta is 2.22 which depicts that it has higher risk associated with it. The debt-to-equity ratio is 1.28 which is considerably well managed along with a positive growth trend in income. The profit margins are shrinking on the other hand. However, some experts and analysts have even given this stock a rating of 10 out of 10. At the start of this quarter, this stock was categorized as one of the stocks with a low price-to-earnings (P/E) ratio. According to the reports coming in, BDM stocks are a good investment for those who believe in the recovery of real estate in the U.S. Judging by the growth trends in the U.S. real estate sector, I believe that this stock is worth considering for investment purposes. There is a chance that this stock might offer capital gains in the future.
