The world of finance is undergoing a major transformation thanks to the rise of financial technology, or FinTech. Financial technology companies are using innovative technologies to disrupt traditional financial institutions and business models.
Stocks of fintech companies that implement digital technology to the financial world are known as fintech stocks. Fintech companies apply the advancement in technology to payment systems, e-commerce, cryptocurrencies, money transfers, personal finance, lending, and banking.
With the growth in technology, fintech stocks offer excellent opportunities for investors to gain from the new trends. The implementation of technological innovation to handle finances has created multiple new avenues. Financial services have become cheaper and simpler, and fintech stocks have become more attractive and value-generating.
Some of the leading fintech stocks belong to large, well-established companies, while others are the budding startups with innovative and disruptive technology. Investors can invest in both for long-term returns and short-term income.
Ticker | Company Name | Last Price | 1-Year Return | Market Cap |
|---|---|---|---|---|
| BABA | Alibaba | $83.01 | 15.26% | 198.4B |
| BL | Blackline | $56.94 | -0.54% | 3.6B |
| GS | Goldman Sachs | $575.35 | 49.93% | 181.4B |
| GWRE | Guidewire Software | $170.41 | 59.59% | 14.2B |
| JPM | JP Morgan & Chase | $241.85 | 41.71% | 681.2B |
| MA | Mastercard | $514.99 | 21.86% | 472.6B |
| PYPL | Paypal Holdings | $87.31 | 43.01% | 87.8B |
| QTWO | Q2 Holdings | $98.64 | 134.86% | 6.0B |
| SQ | Square | $86.45 | 24.33% | 54.3B |
| SSNC | SS&C Technologies Holdings | $75.38 | 25.22% | 18.6B |
| V | Visa | $312.91 | 18.83% | 613.8B |
| GPN | Global Payments | $111.12 | -15.40% | 28.3B |
| MKTX | MarketAxess Holdings | $214.82 | -21.13% | 8.1B |
| MELI | MercadoLibre | $1,747.80 | 11.09% | 88.8B |
| AAPL | Apple | $241.62 | 30.51% | 3648.5B |
| FB | $185.26 | #N/A | 1553.6B | |
| LC | LendingClub | $15.92 | 82.57% | 1.8B |
| ADYYF | Adyen | $1,529.00 | 19.92% | 46.3B |
| INTU | Intuit | $616.71 | 1.91% | 172.7B |
| GDOT | Green Dot Corp | $9.34 | 2.08% | 502.4M |
| ORCL | Oracle | $161.77 | 56.10% | 453.8B |
| ENV | Envestnet | $0.01 | -50.00% | 3.5M |
| HVBTF | Hive Blockchain Technologies | #N/A | #N/A | #N/A |
| AMZN | Amazon | $220.87 | 45.91% | 2338.6B |
| PAGS | PagSeguro Digital | $6.36 | -48.63% | 2.0B |
| DFS | Discover Financial Services | $176.60 | 58.50% | 44.4B |
| EBAY | eBay | $70.65 | 67.66% | 34.0B |
| TSS | Total System Services | $6.15 | -11.13% | 58.9M |
| FISV | Fiserv | $198.26 | 60.53% | 116.6B |
| AXP | American Express | $300.31 | 60.79% | 212.0B |
| JKHY | Jack Henry & Associates | $171.28 | 2.45% | 12.5B |
| WU | Western Union | $10.36 | -14.73% | 3.5B |
| SFTBY | Softbank Group | $29.43 | 36.12% | 13775.3B |
| LX | LexinFintech | $5.69 | 191.79% | 944.6M |
Why You Should Be Investing In FinTech Stocks
There are a few reasons why you should consider investing in FinTech stocks. First of all, the sector is growing at a rapid pace. According to a report by McKinsey, the FinTech industry is expected to grow by 10 to 12 percent per year . This growth is being driven by advances in technology, as well as by the increasing demand for better and more convenient financial services.
Another reason to invest in FinTech stocks is that the industry is still in its early stages of development. This means that there is a lot of room for growth and for new companies to emerge as leaders in the space. In addition, many of the existing FinTech companies are still relatively small, which means they could see significant increases in their stock prices as they grow.
Finally, it’s worth noting that the FinTech sector is becoming increasingly important in the global economy. As traditional financial institutions are disrupted by new technologies, the role of FinTech companies is likely to become even more important in the years ahead. For these reasons, investing in FinTech stocks could be a wise move for long-term investors.
There are a few ways that investors can profit from the growth of the FinTech industry. One way is to invest in individual stocks of promising companies in the sector. Another way is to invest in exchange-traded funds (ETFs) that track the performance of the sector. Finally, investors can also profit from the growth of the industry by investing in venture capital funds that invest in early-stage FinTech companies.
The future of financial technology looks very promising. The sector is expected to continue growing at a rapid pace, and new companies are emerging all the time. This means that there will be plenty of opportunities for investors to profit from the growth of the industry. In addition, as traditional financial institutions are increasingly disrupted by new technologies, the role of FinTech companies is likely to become even more important in the years ahead.
Factors to Consider Before Investing in Fintech Stocks
Investing in any stock carries some risk. However, there are some risks that are specific to investing in stocks of companies in the FinTech sector. One such risk is that many FinTech companies are still relatively new and unproven. This means that their stock prices can be volatile and subject to significant swings. Another risk is that many FinTech companies are dependent on raising additional capital from investors, which means they could be dilutive to shareholders if they need to raise more money.
On the other hand, there are also some potential rewards that come with investing in FinTech stocks. One such reward is that many FinTech companies are growing at a rapid pace, which could lead to significant increases in their stock prices. Another reward is that many FinTech companies are still relatively small, which means they could be acquired by larger companies at a premium.
Investors must consider certain parameters that are specific to a trending and disruptive industry like fintech. The factors to be considered include the financial metrics like revenue growth rates, profit margins, total addressable market, the total payment volume, and gross merchandise volume.
Fintech is a dynamic business, with innovations popping up every now and then. Therefore, investors should look for fintech stocks that can survive the tough competition with its large and innovative suite of products and services, intellectual property assets, and rapid research & development.
Investors must also consider the risks associated with investing in fintech stocks. Fintech stocks have broad exposure to credit risks, consolidation, and regulations. A balanced approach can help investors create a profitable portfolio with fintech stocks.
Examples of FinTech Stocks
1. PayPal (PYPL) – PayPal is a leading online payment platform that enables consumers and businesses to send and receive money online. The company has a multibillion-dollar market capitalization and is one of the most widely used payment platforms in the world. PayPal is a great choice for investors looking for a leading FinTech stock with a strong track record of growth.
2. Square (SQ) – Square is a financial services and mobile payment company that offers businesses a range of solutions for accepting and managing payments. The company has a multibillion-dollar market capitalization and is one of the fastest-growing FinTech companies. Square is a good choice for investors looking for a growth-oriented FinTech stock.
3. Robinhood (RH) – Robinhood is a commission-free online brokerage that enables investors to buy and sell stocks and other financial instruments. The company has a multibillion-dollar market capitalization and is one of the most popular investing platforms among millennial investors. Robinhood is a good choice for investors who are looking for a low-cost way to invest in the stock market.
4. SoFi (SOFI) – SoFi is a financial technology company that offers a range of products and services, including student loan refinancing, personal loans, and investment products. The company has a market capitalization of over $4 billion and is one of the fastest-growing FinTech companies. SoFi is a good choice for investors looking for exposure to the growing student loan refinancing market.
5. Coinbase (COIN) – Coinbase is a leading digital currency exchange that enables users to buy and sell cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. The company has a multibillion-dollar market capitalization and is one of the most popular cryptocurrency exchanges. Coinbase is a good choice for investors who are looking for exposure to the growing digital currency market.
6. LendingClub (LC) – LendingClub is an online lending platform that enables borrowers to obtain loans from individual and institutional investors. The company has a multibillion-dollar market capitalization and is one of the leading FinTech companies in the online lending space. LendingClub is a good choice for investors who are looking for exposure to the growing online lending market.
Which Fintech Stocks Should I Buy?
A wide variety of fintech stocks trade on the stock exchanges. Some of them are big banks that use digital technology for running their businesses, while others are the small growing startups with largely untapped potential markets. We have aggregated a list of the best fintech stocks, including both large and growing companies.
Investment in fintech stocks is an ideal proposition for all sorts of investors, be it income, growth, or value investors. The big banks generate high annual returns, high yields, and are exposed to heavy regulations. On the other hand, the upcoming companies are riskier, but they have high returns potential in addition to excellent value and growth opportunities.
