Buy shares low, hold them and sell high. That’s a
very easy and simple strategy but investing is much more than buying stocks and
waiting until the price goes up. You have to select the best stocks by
fundamentals, business model, market strength, price ratios and so on.
Investing is hard work and your emotions shouldn’t be a part of your selection
process. Do you lose money with a trade? Don’t care that’s part of the business
of a stock trader. Take care that your single trade positions are not big in
relation to your trading limits or margins. They should account for less than 1
percent of your net worth.
Today, I like to screen the financial sector by
the best growth stock picks for 2013. The whole sector has too many stocks
listed, around 2,868 - No wonder that we need a consolidation with the
financial crisis. Stocks from the sector are totally valuated at 168.25
trillion. The average P/E amounts to 13.04 and the yield is 2.45. What do you
think, are stocks from the financial sector cheap or right to buy now? Let me
know below in the comment box bellow.
These are my criteria:
- Forward P/E under 15
- Past 5Y Sales growth over 10 percent
- Earnings per share growth for the next five
years over 10 percent
- Operating Margin over 10 percent
- Market Capitalization over 2 billion
Eleven stocks remain of which six have a current
buy or better rating. Ten of the results pay dividends. I am not a big fan of financial
stocks because I could not evaluate the risks of the banking assets. I like stocks
from services stocks with financial relations like Thomson Reuters, Moodys or Nasdaq.
BlackRock (NYSE:BLK)
has a market capitalization of $35.82 billion. The company employs
10,400 people, generates revenue of $9.081 billion and has a net income
of $2.339 billion. The firm’s earnings before interest, taxes,
depreciation and amortization (EBITDA) amounts to $3.543 billion. The
EBITDA margin is 39.02 percent (the operating margin is 35.78 percent
and the net profit margin 25.76 percent).
Financial Analysis: The total debt represents 3.54 percent of the company’s assets and the total debt in relation to the equity amounts to 25.41 percent. Due to the financial situation, a return on equity of 9.05 percent was realized. Twelve trailing months earnings per share reached a value of $12.86. Last fiscal year, the company paid $5.50 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.96, the P/S ratio is 3.83 and the P/B ratio is finally 1.46. The dividend yield amounts to 2.92 percent and the beta ratio has a value of 1.49.
Financial Analysis: The total debt represents 3.54 percent of the company’s assets and the total debt in relation to the equity amounts to 25.41 percent. Due to the financial situation, a return on equity of 9.05 percent was realized. Twelve trailing months earnings per share reached a value of $12.86. Last fiscal year, the company paid $5.50 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.96, the P/S ratio is 3.83 and the P/B ratio is finally 1.46. The dividend yield amounts to 2.92 percent and the beta ratio has a value of 1.49.
| Long-Term Stock History Chart Of BlackRock (BLK) |
| Long-Term Dividends History of BlackRock (BLK) |
| Long-Term Dividend Yield History of BlackRock (BLK) |
NASDAQ OMX Group (NASDAQ:NDAQ)
has a market capitalization of $4.07 billion. The company employs 2,503
people, generates revenue of $3.438 billion and has a net income of
$383.00 million. The firm’s earnings before interest, taxes,
depreciation and amortization (EBITDA) amounts to $787.00 million. The
EBITDA margin is 22.89 percent (the operating margin is 19.72 percent
and the net profit margin 11.14 percent).
Financial Analysis:
The total debt represents 15.02 percent of the company’s assets and the
total debt in relation to the equity amounts to 42.54 percent. Due to
the financial situation, a return on equity of 7.98 percent was
realized. Twelve trailing months earnings per share reached a value of
$1.99. Last fiscal year, the company paid $0.00 in the form of dividends
to shareholders.
Market Valuation:
Here are the price ratios of the company: The P/E ratio is 12.41, the
P/S ratio is 1.18 and the P/B ratio is finally 0.86. The dividend yield
amounts to 2.11 percent and the beta ratio has a value of 0.84.
| Long-Term Stock History Chart Of NASDAQ OMX Group (NDAQ) |
| Long-Term Dividends History of NASDAQ OMX Group (NDAQ) |
| Long-Term Dividend Yield History of NASDAQ OMX Group (NDAQ) |
Discover Financial (NYSE:DFS)
has a market capitalization of $20.28 billion. The company employs
11,650 people, generates revenue of $6.345 billion and has a net income
of $2.226 billion. The firm’s earnings before interest, taxes,
depreciation and amortization (EBITDA) amounts to $4.106 billion. The
EBITDA margin is 64.71 percent (the operating margin is 49.69 percent
and the net profit margin 31.51 percent).
Financial Analysis:
The total debt represents 26.66 percent of the company’s assets and the
total debt in relation to the equity amounts to 222.48 percent. Due to
the financial situation, a return on equity of 29.96 percent was
realized. Twelve trailing months earnings per share reached a value of
$4.32. Last fiscal year, the company paid $0.20 in the form of dividends
to shareholders.
Market Valuation:
Here are the price ratios of the company: The P/E ratio is 9.30, the P/S
ratio is 2.87 and the P/B ratio is finally 2.58. The dividend yield
amounts to 1.00 percent and the beta ratio has a value of 1.44.
| Long-Term Stock History Chart Of Discover Financial (DFS) |
| Long-Term Dividends History of Discover Financial (DFS) |
| Long-Term Dividend Yield History of Discover Financial (DFS) |
Take a closer look at the full list of the best financial stock picks for 2013. The average P/E ratio amounts to 13.34
and forward P/E ratio is 11.53. The dividend yield has a value of 2.78 percent.
Price to book ratio is 2.53 and price to sales ratio 2.82. The operating margin
amounts to 32.65 percent and the beta ratio is 1.29. The average stock from the
screening results has a debt to equity ratio of 2.18.
Here is the full table with
some fundamentals (TTM):
 |
| Best Financial Stock Picks For 2013 (Click to enlarge) |