7 reliable big-name financial stocks to buy

There is no doubt that the current economic transition from low and slow (interest rates and growth) to fast and furious is wreaking havoc on the stock market. But that doesn’t mean financial stocks will pay the price.

The fact is that financial stocks – at least good ones – are designed to make money in any market. While most individual investors avoid short positions, options, and extended hedging strategies, financial firms do it all the time. Banks and insurance companies have huge bond portfolios to manage and trade as well as greater flexibility on rates.

They have legions of professional traders who are highly paid to ensure that no matter what the market conditions are, they are on the safe side of trades. And they are aware of the customer order flow and now know how to take advantage of it. That’s why the game of short-term trading is for the brave (and the rich!).

The best way to approach this as an individual investor is to find the solid financial stocks that will make the most of a bad situation – as well as a good one. These seven all meet my criteria for doing just that:

  • Raymond James (NYSE:RJF)
  • Cincinnati Financial (NADSAQ:CINF)
  • Financial Colombia (NASDAQ:CLBK)
  • Woori Financial Group (NYSE:WF)
  • Itau Unibanco (NYSE:ITUB)
  • Houlihan Lokey (NYSE:HLI)
  • Signature Bank (NASDAQ:SBNY)

Financial stocks to buy: Raymond James (RJF)

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Curiously, RJF, a top investment management firm, got its start not in New York, but in St. Petersburg, Florida six decades ago.

Today, it’s a quiet giant with a market capitalization of nearly $21 billion. It’s not as big as some of its siblings, but that can be a good thing. In this kind of volatility, it’s the headliners who take the big hits. RJF can keep their heads down and do their job in peace.

In the coming quarters, its banking division that offers commercial loans and mortgages should benefit greatly from higher rates, as it gives lenders more flexibility in what they can charge customers.

The stock has gained 25% in the last 12 months, but it has a price-to-earnings (P/E) ratio below 16. And it has a dividend of 1.4%.

This title has a “B” rating in my portfolio binder.

Cincinnati Financial (CINF)

Cincinnati Financial logo displayed on a cellphone screen.

Source: Igor Golovniov / Shutterstock.com

As a medium-sized P&C and life insurance company, CINF is doing very well as the economy recovers from the pandemic. Additionally, a respite from significant storm damage over the past year has also helped.

Add to that the fact that interest rates are now rising. Since P&C companies need to keep much of their cash in cash equivalents like treasury bills, an active trading desk comes in handy. In this type of market, money is flowing into bonds and that’s great for the investment side of CINF.

The stock has gained 15% over the past 12 months and 6% since the start of the year. It still has a P/E below 7. It also has a strong 2.2% dividend.

This title has a “B” rating in my portfolio binder.

Financial stocks to buy: Columbia Financial (CLBK)

The Columbia Bank logo, owned by Columbia Financial, is seen on the side of a branch.

Source: quiggyt4 / Shutterstock.com

Operating as a holding company, CLBK operates Columbia Bank, a community bank in New Jersey that has been in operation for nearly 100 years. Suffice it to say, New Jersey has changed significantly over the past century. And a financial stock that has participated in this change is well positioned in today’s market.

As with insurers, banking is a cash business. And banks must have sufficient reserves to meet customer needs and other operations. This means a large bond portfolio as well as a conservative stock portfolio. Both of these investments perform well in volatile markets with seasoned traders. And rising rates certainly help lending margins.

CLBK stock has gained 25% over the past 12 months and 6% over the past three months. Revenue will continue to rise and likely fall from its current P/E of 24.

This title has a “B” rating in my portfolio binder.

Woori Financial Group (WF)

The Woori Bank logo, owned by Woori Financial Group, is seen on a branch.  The building is decorated with illustrations of bees.

Source: 2p2play / Shutterstock.com

Chances are you’ve never heard of WF before. Indeed, WF is the largest bank in South Korea and is owned by the South Korean government and the Korean Deposit Insurance Corporation.

It has a market cap of $8 billion in the US market. His ownership means there’s little risk of him having any significant issues. And for now, it’s been a bargain, with better performance likely to come as South Korea’s economy grows. An Asia-Pacific partnership that aims to reduce tariffs between participating countries is progressing and this will be a great benefit for its regional trade.

Currently, WF shares are trading at a P/E of just 4 and are up 24% in the last 12 months, although they are down 2% in the last three months. It has a very reliable dividend of 3.2%.

This title has a “B” rating in my portfolio binder.

Financial stocks to buy: Itaú Unibanco (ITUB)

The Itaú Unibanco logo is visible on a panel.

Source: SERGIO AGAINST RANGEL / Shutterstock.com

Considering its stock price of around $5, you’re likely to raise your eyebrows at how serious this bank is. But ITUB is the second largest bank in Latin America and has branches in North America, Europe and Asia. It has a market cap of $46 billion, so it’s definitely a big bank with significant operations globally.

And although it is headquartered in Brazil, its broad reach gives it the ability to control risk and expand opportunities in various established and emerging markets.

ITUB stock is doing very well. Over the past 12 months it has gained 19% and has been very strong lately – up 17% in the past three months and 26% year-to-date. It also has an attractive dividend of 2.8% and a P/E of 9.

This title has a “B” rating in my portfolio binder.

Houlihan Lokey (HLI)

100 dollar bills passing from hand to hand.  Can represent stimulus checks or a payment.

Credit: Maryna Pleshkun/Shutterstock.com

Operating from its headquarters in Los Angeles, HLI is a multinational investment bank and advisory service for corporations, institutions and governments. It is well known as the company that engineered the collapse of Lehman Brothers in 2008 with the company’s creditors.

Today’s dynamic market conditions are always exciting times when it comes to business strategy. This can be a great time to look for merger and acquisition opportunities or to refocus on specific business sectors. HLI is a trusted company to help you with this type of restructuring or finding partners. In 2021, it was the No. 1 company in M&A transactions as well as in distressed debt and restructuring.

But HLI currently only has a market cap of $7 billion and a P/E of just 15. That means there’s a lot of potential even after its 53% 12-month run. It also has a stable dividend of 1.7%.

This title has an “A” rating in my portfolio binder.

Finance stocks to buy: Signature Bank (SBNY)

The Signature Bank logo is displayed above the entrance to a building.

Source: PL Gould / Shutterstock.com

SBNY is a commercial bank that has a customer-centric approach to private businesses. It also has subsidiaries that provide equipment rental and brokerage services.

With the amount of cash circulating in the markets these days, private companies rely on their banks for guidance in exploring their options. Whether clients are refinancing debt, seeking more investors, looking to sell property or operate assets, SBNY has solutions.

And companies with stacks of cash like these types of markets so they can acquire companies at a good price.

SBNY has rallied over the past 12 months – up 30% – but has eased a little over the past few months. But it remains a value, with a P/E of 19.

This title has a “B” rating in my portfolio binder.

At the date of publication, Louis Navellier holds a position within RJF. Louis Navellier has held (neither directly nor indirectly) any other position in the securities mentioned in this article.

The InvestorPlace research staff member primarily responsible for this article has not held (directly or indirectly) any position in the securities mentioned in this article.

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