12 High Growth Financial Stocks To Buy

In this article, we discuss 12 high growth financial stocks to buy.

The financial services industry is facing difficult circumstances due to a complex combination of factors including high inflation, unpredictable interest rates, supply chain disruptions, and slowing economies. Regulators are focused on ensuring that companies prioritize their financial and operational resilience while continuing to provide support to their customers. The immediate future will require close attention to disruptive economic factors, and lenders will need to demonstrate to supervisors how they are managing credit risks. Insurance companies and investment funds may also experience pressure related to credit in their portfolios, and may need to strengthen their credit teams if the number of defaults and corporate restructurings increases.

Despite the challenges faced by several wealth management firms in 2022, the prevailing market conditions could persuade hesitant sellers to yield to larger banks that can absorb the escalating compliance expenses and use their current technology platforms to promote the digitization initiative that many smaller private banks have not been able to achieve with their current infrastructure.

In the last two years, the financial services sector has proven its capacity to effectively handle extraordinary levels of ambiguity. Whether in real estate, insurance, investment management, or banking and capital markets, financial service providers worldwide responded to the pandemic with exceptional resilience and flexibility, assisting individuals, businesses, and governments in their recovery efforts. Some of the top high growth financial stocks to invest in include M&T Bank Corporation (NYSE:MTB), S&P Global Inc. (NYSE:SPGI), and East West Bancorp, Inc. (NASDAQ:EWBC). Investors can also check out 12 Best Financial Dividend Stocks To Buy and 11 Best Financial Services Stocks To Buy Now.

Our Methodology 

We used a stock screener and filtered for financial companies with year-over-year quarterly revenue growth of more than 20%. From the resultant dataset, we selected the financial stocks with the highest revenue growth rates as of the end of the third and fourth quarter of 2022, according to the latest data available for each firm. The list is arranged in ascending order of the year-over-year quarterly revenue growth rate. 

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High Growth Financial Stocks To Buy

12. Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG)

Number of Hedge Fund Holders: 12

Quarterly Revenue Growth YoY as of December 30, 2022: 22.00%

Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) was founded in 1880 and is headquartered in Tokyo, Japan. It operates as the bank holding company for MUFG Bank, providing financial products and services in Japan, the United States, Europe, Asia/Oceania, and internationally. On February 2, Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) reported 9-month GAAP earnings per share of ¥27.42.

On December 15, Goldman Sachs analyst Makoto Kuroda initiated coverage of Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) with a Buy recommendation and a price target of 1,010 yen. The analyst also included the stock on Goldman’s Conviction List. Kuroda believes that MUFG has potential for growth from both domestic and international bank lending, as well as from steady improvements in its U.S. corporate clients business. According to the analyst’s research note, investors might anticipate slightly higher profit levels than the market consensus.

According to Insider Monkey’s third quarter database, 12 hedge funds held stakes worth $30.4 million in Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG), compared to 12 funds in the prior quarter worth $22.8 million. Ben Levine, Andrew Manuel, and Stefan Renold’s LMR Partners held the biggest stake in the company, comprising 2.50 million shares worth $11.25 million. 

Like M&T Bank Corporation (NYSE:MTB), S&P Global Inc. (NYSE:SPGI), and East West Bancorp, Inc. (NASDAQ:EWBC), Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is one of the top high growth financial stocks to monitor. 

11. Regions Financial Corporation (NYSE:RF)

Number of Hedge Fund Holders: 32

Quarterly Revenue Growth YoY as of December 30, 2022: 22.7%

Regions Financial Corporation (NYSE:RF) was founded in 1971 and is headquartered in Birmingham, Alabama. It is a financial holding company that provides banking and bank-related services to individual and corporate customers. It operates through three segments – Corporate Bank, Consumer Bank, and Wealth Management. On January 20, Regions Financial Corporation (NYSE:RF) reported a Q4 GAAP EPS of $0.70 and a revenue of $2 billion, beating Wall Street estimates by $0.04 and $50 million, respectively. Revenue for the quarter increased 22.7% on a year-over-year basis, making it one of the top high growth financial stocks to invest in. 

On January 23, Truist analyst Jennifer Demba raised the firm’s price target on Regions Financial Corporation (NYSE:RF) to $27 from $24 and kept a Buy rating on the shares after its Q4 earnings beat. The analyst believes that the company is still in the early stages of growth in various business lines and has better protection against declining interest rates compared to its competitors. Additionally, Regions Financial Corporation (NYSE:RF) is focused on controlling expenses. The analyst further noted that as credit costs become normal for the industry, the company’s disciplined lending practices should become more apparent.

According to Insider Monkey’s third quarter database, 32 hedge funds were long Regions Financial Corporation (NYSE:RF), compared to 28 funds in the prior quarter. Richard S. Pzena’s Pzena Investment Management is the largest stakeholder of the company, with 3.3 million shares worth $66.8 million. 

10. Western Alliance Bancorporation (NYSE:WAL)

Number of Hedge Fund Holders: 25

Quarterly Revenue Growth YoY as of December 30, 2022: 25.0%

Western Alliance Bancorporation (NYSE:WAL) was founded in 1994 and is headquartered in Phoenix, Arizona. It operates as the bank holding company for Western Alliance Bank that provides banking products and services primarily in Arizona, California, and Nevada. Western Alliance Bancorporation (NYSE:WAL) is one of the top high growth financial stocks to invest in. On February 15, the company declared a $0.36 per share quarterly dividend, in line with previous. The dividend is payable on March 3, to shareholders of record on February 17. 

On January 26, Stephens analyst Andrew Terrell raised the firm’s price target on Western Alliance Bancorporation (NYSE:WAL) to $86 from $80 and kept an Overweight rating on the shares. In a research note to investors, the analyst explained that while Western Alliance Bancorporation (NYSE:WAL)’s Q4 EOP deposits may have surprised some people, the rebound in deposits during Q1 of the current financial year, as well as the guidance for FY23, have provided additional reassurance. The analyst still believes that Western Alliance Bancorporation (NYSE:WAL) has a strong credit quality profile, high returns compared to its peers, and better growth in a challenging environment.

According to Insider Monkey’s Q3 data, 25 hedge funds were long Western Alliance Bancorporation (NYSE:WAL), compared to 35 funds in the prior quarter. Lansing Davis’ Davis Capital Partners is the biggest stakeholder of the company, with 2.40 million shares worth $157.7 million. 

Here is what ClearBridge Investments SMID Cap Growth Strategy has to say about Western Alliance Bancorporation (NYSE:WAL) in its Q4 2021 investor letter:

“Another new addition was Western Alliance Bancorp (WAL), an Arizona-based community lender. WAL maintains our banking exposure as we have begun to exit SVB Financial due to capitalization. WAL has made a number of strategic niche acquisitions in the past decade and continues to demonstrate above-industry loan growth and good credit metrics.”

9. The Toronto-Dominion Bank (NYSE:TD)

Number of Hedge Fund Holders: 22

Quarterly Revenue Growth YoY as of October 30, 2022: 35.10%

The Toronto-Dominion Bank (NYSE:TD) was founded in 1855 and is headquartered in Toronto, Canada. The company provides financial products and services in Canada, the United States, and internationally. It operates through Canadian Personal and Commercial Banking, U.S. Retail, Wealth Management and Insurance, and Wholesale Banking segments. It is one of the premier high growth financial stocks to invest in. 

On February 17, Scotiabank raised the firm’s price target on The Toronto-Dominion Bank (NYSE:TD) to C$104 from C$100 and maintained a Sector Perform rating on the shares.

According to Insider Monkey’s Q3 data, 22 hedge funds were bullish on The Toronto-Dominion Bank (NYSE:TD), compared to 19 funds in the prior quarter. D E Shaw is a significant position holder in the company, with 648,901 shares worth nearly $40 million. 

8. Comerica Incorporated (NYSE:CMA)

Number of Hedge Fund Holders: 45

Quarterly Revenue Growth YoY as of December 30, 2022: 36.0%

Comerica Incorporated (NYSE:CMA) is a Texas-based provider of financial products and services. The company operates through Commercial Bank, Retail Bank, Wealth Management, and Finance segments. On January 19, Comerica Incorporated (NYSE:CMA) reported a Q4 GAAP EPS of $2.58 and a revenue of $1.02 billion, outperforming Wall Street estimates by $0.03 and $10 million, respectively. Revenue for the period climbed 36% on a year-over-year basis. 

On February 15, Piper Sandler analyst R. Scott Siefers downgraded Comerica Incorporated (NYSE:CMA) to Neutral from Overweight with a price target of $82, up from $77. The analyst attributes the downgrade to the stock’s recent recovery and its current valuation, stating that the risk/reward balance is now more even.

According to Insider Monkey’s third quarter database, 45 hedge funds were long Comerica Incorporated (NYSE:CMA), compared to 38 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 2.37 million shares worth $169 million.

7. Blue Owl Capital Inc. (NYSE:OWL)

Number of Hedge Fund Holders: 26

Quarterly Revenue Growth YoY as of December 30, 2022: 37.1%

Blue Owl Capital Inc. (NYSE:OWL) is a New York-based asset manager that provides comprehensive solutions with a permanent capital base, which allows the company to offer a complete platform to middle market businesses, large alternative asset managers, real estate owners, and tenants. On February 13, Blue Owl Capital Inc. (NYSE:OWL) declared a $0.13 per share quarterly dividend, a 8.3% increase from its prior dividend of $0.12. The dividend is payable on March 6, to shareholders of record on February 24. It is one of the best high growth financial stocks to invest in. 

On January 2, Michael Brown, an analyst at Keefe Bruyette, downgraded Blue Owl Capital Inc. (NYSE:OWL) to Market Perform from Outperform and set a price target of $13. He suggested that investors approach alternative managers with caution in 2023 due to his prediction that many of the challenges faced in 2022 will continue to persist.

According to Insider Monkey’s Q3 data, 26 hedge funds were bullish on Blue Owl Capital Inc. (NYSE:OWL), compared to 24 funds in the prior quarter. Alexander West’s Blue Pool Capital is the biggest stakeholder of the company, with 41.15 million shares worth $380 million. 

6. Interactive Brokers Group, Inc. (NASDAQ:IBKR)

Number of Hedge Fund Holders: 35

Quarterly Revenue Growth YoY as of December 30, 2022: 40.3%

Interactive Brokers Group, Inc. (NASDAQ:IBKR) was founded in 1977 and is headquartered in Greenwich, Connecticut. The company operates globally as an automated electronic broker. Its focus is on carrying out, processing, and finalizing trades in a variety of financial instruments, such as stocks, options, futures, foreign exchange products, bonds, mutual funds, exchange traded funds, metals, and cryptocurrencies. Interactive Brokers Group, Inc. (NASDAQ:IBKR)’s quarterly year-over-year revenue growth of 40.3% makes it one of the premier high growth financial stocks to invest in. 

On January 17, Interactive Brokers Group, Inc. (NASDAQ:IBKR) declared a $0.10 per share quarterly dividend, in line with previous. The dividend is payable on March 14, to shareholders of record on March 1. 

Bank of America analysts included Interactive Brokers Group, Inc. (NASDAQ:IBKR) on the “US 1” list on February 2, which consists of the firm’s top investment recommendations from the universe of Buy-rated, U.S.-listed stocks.

According to Insider Monkey’s third quarter database, 35 hedge funds were bullish on Interactive Brokers Group, Inc. (NASDAQ:IBKR), compared to 41 funds in the earlier quarter. Select Equity Group is the leading stakeholder of the company, with 5.60 million shares worth $358 million. 

In addition to M&T Bank Corporation (NYSE:MTB), S&P Global Inc. (NYSE:SPGI), and East West Bancorp, Inc. (NASDAQ:EWBC), Interactive Brokers Group, Inc. (NASDAQ:IBKR) is one of the premier high growth stocks to invest in. 

LVS Advisory made the following comment about Interactive Brokers Group, Inc. (NASDAQ:IBKR) in its Q3 2022 investor letter:

“The most notable new position this year has been our investment in Interactive Brokers Group, Inc. (NASDAQ:IBKR). I published a detailed write-up (link here) and also appeared on the ‘Yet Another Value Podcast’ (link here) to discuss our IBKR thesis. To boil it down, IBKR benefits from higher interest rates, and the stock was available at an exceptionally cheap price. I believe IBKR represents a particularly good risk/reward bet and have made it our largest position.”

5. East West Bancorp, Inc. (NASDAQ:EWBC)

Number of Hedge Fund Holders: 33

Quarterly Revenue Growth YoY as of December 30, 2022: 40.5%

East West Bancorp, Inc. (NASDAQ:EWBC) is a California-based bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals. It operates through three segments – Consumer and Business Banking, Commercial Banking, and Other. On January 26, East West Bancorp, Inc. (NASDAQ:EWBC) declared a $0.48 per share quarterly dividend, a 20% increase from its prior dividend of $0.40. The dividend was distributed to shareholders on February 21. 

On January 27, Truist analyst Jennifer Demba raised the firm’s price target on East West Bancorp, Inc. (NASDAQ:EWBC) to $85 from $77 and reiterated a Buy rating on the shares after its Q4 earnings beat. The analyst noted that the company’s higher net interest income was partially offset by lower fee income, higher expenses, and higher provisioning. Additionally, the firm expressed its encouragement with East West Bancorp, Inc. (NASDAQ:EWBC)’s continued positive credit quality trends and finds the stock’s valuation of 7.9-times expected forward earnings to be “attractive”.

According to Insider Monkey’s Q3 data, 33 hedge funds were bullish on East West Bancorp, Inc. (NASDAQ:EWBC), compared to 35 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with 1.05 million shares worth $70.75 million. 

Here is what Aristotle Capital Management Value Equity has to say about East West Bancorp, Inc. (NASDAQ:EWBC) in its Q1 2022 investor letter:

“We purchased East West Bancorp in the third quarter of 2017; however, our history with the business stretches back further having twice previously invested. Companies we consider to be high-quality like East West tend to remain high quality, and we have long admired the business for its uniqueness among the otherwise homogeneous U.S. banking industry. Its dominant market share built over generations in Asian communities – and difficult-to-replicate experience due to culture, geography and business practices – create distinct competitive advantages in our view. During our most recent holding period, the bank achieved sustained loan growth, a catalyst we identified, through its continued leadership position as the financial “bridge” for customers doing business in the U.S. and China. Moreover, East West also realized market share gains in its headquarters state of California. With these catalysts nearing completion, we decided to exit our investment to fund the purchase of Oshkosh. As always, we will continue to study East West and, in the future, may once again find an opportunity to be investors.”

4. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 90

Quarterly Revenue Growth YoY as of December 30, 2022: 40.70%

S&P Global Inc. (NYSE:SPGI) is a New York-based company that offers credit ratings, benchmarks, analytics, and workflow solutions globally. It operates through six segments – S&P Global Ratings, S&P Dow Jones Indices, S&P Global Commodity Insights, S&P Global Market Intelligence, S&P Global Mobility, and S&P Global Engineering Solutions. On January 25, S&P Global Inc. (NYSE:SPGI) declared a $0.90 per share quarterly dividend, a 5.9% increase from its prior dividend of $0.85. The dividend is payable on March 10, to shareholders of record on February 24. 

On February 13, Argus analyst John Eade increased the price target on S&P Global Inc. (NYSE:SPGI)’s shares from $380 to $400 and maintained a Buy rating. The company’s performance has been better than the market in the past quarter, and the analyst believes that the double-digit earnings growth rate will return this year. 

According to Insider Monkey’s third quarter database, 90 hedge funds were long S&P Global Inc. (NYSE:SPGI), compared to 84 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 8.7 million shares worth $2.6 billion. 

Andvari Associates made the following comment about S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter:

“S&P Global Inc. (NYSE:SPGI) is another company we own that is part of a duopoly in the business of credit rating. S&P and Moody’s have roughly equal market shares and rate more than 90% of all bonds worldwide. The service provides high value for the cost. A company that chooses to issue debt without a rating will pay an interest rate that could be higher by half of a percent. The cost of a higher interest rate far exceeds any savings gained by not using the services of S&P.

We think of S&P as a toll road that earns fees from its customers in exchange for cost-effective access to capital. As such, the company has extraordinary margins and pricing power and requires little of its own capital to grow. Even after fully reinvesting in its business, S&P still has an excess of cash. In 2021, S&P produced $3.5 billion of free cash from $8.3 billion of revenues. The company returns the majority of its free cash to investors in the form of dividends and share repurchases.”

3. NatWest Group plc (NYSE:NWG)

Number of Hedge Fund Holders: 7

Quarterly Revenue Growth YoY as of December 30, 2022: 42.7%

NatWest Group plc (NYSE:NWG) was founded in 1727 and is headquartered in Edinburgh, the United Kingdom. It provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, Commercial & Institutional segments. NatWest Group plc (NYSE:NWG)’s total income of £3.71 billion climbed 42.7% on a year-over-year basis. 

Aman Rakkar, an analyst at Barclays, downgraded NatWest Group plc (NYSE:NWG) from Overweight to Equal Weight and set a price target of 400 GBp on February 6. The analyst believes that there are potential long-term risks associated with the bank’s liquidity unwind and deposit outflows. The analyst expressed concern that these factors could lead to “over-earning” issues.

According to Insider Monkey’s third quarter database, 7 hedge funds were bullish on NatWest Group plc (NYSE:NWG), compared to 10 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the leading stakeholder of the company, with 3.34 million shares worth $16.6 million. 

Here is what Artisan Partners has to say about NatWest Group plc (NYSE:NWG) in its Q2 2021 investor letter:

“It is worth discussing two positions that we sold, (which includes) Natwest Group. Natwest, a majority state-owned British banking and insurance firm, was one of the worst investments we’ve ever made.

Natwest Group was purchased in 2013. Since that initial purchase, the investment’s total return was negative 44% and the largest negative contribution to performance. Over the same time period, the MSCI EAFE Index has increased by 79%. It is important to consider the return of the index, as the damage done by your manager must include both the 44% loss and the opportunity cost of owning an average stock…” (Click here to see the full text)

2. Bank of Montreal (NYSE:BMO)

Number of Hedge Fund Holders: 9

Quarterly Revenue Growth YoY as of December 30, 2022: 54.80%

Bank of Montreal (NYSE:BMO) was founded in 1817 and is headquartered in Montreal, Canada. It provides diversified financial services primarily in North America. On January 24, Bank of Montreal (NYSE:BMO) announced a C$650 million domestic institutional non-viability contingent capital (NVCC) preferred stock offering. The bank is going to sell class B preferred shares, series 52 with a fixed rate for five years, which are not cumulative and can be reset. The shares will only be available to specific institutional investors, and the price per share will be $1,000.

On February 7, Desjardins analyst Doug Young raised the firm’s price target on Bank of Montreal (NYSE:BMO) to C$146 from C$143 and maintained a Buy rating on the shares.

According to Insider Monkey’s third quarter database, 9 hedge funds were bullish on Bank of Montreal (NYSE:BMO). It is one of the top high growth financial stocks to monitor, with quarterly year-over-year revenue growth of 54.80% as of the end of December 2022. 

1. M&T Bank Corporation (NYSE:MTB)

Number of Hedge Fund Holders: 44

Quarterly Revenue Growth YoY as of December 30, 2022: 66.2%

M&T Bank Corporation (NYSE:MTB) is a New York-based bank holding company that provides commercial and retail banking services. With quarterly year-over-year revenue growth of 66.2% as of the end of December 2022, M&T Bank Corporation (NYSE:MTB) is one of the premier high growth financial stocks to invest in. 

According to Deutsche Bank analyst Matt O’Connor, the price target for M&T Bank Corporation (NYSE:MTB) has been decreased from $255 to $175, while the Buy rating on the shares remains unchanged as of January 6. The analyst expects that the U.S. bank stocks will experience new lows, and predicts that bank stocks will trade below their usual historical range of 60% to 80%. O’Connor believes that the bank earnings might have peaked, which could cause some downside risk due to the reserve build and valuations in case of a recession.

According to Insider Monkey’s third quarter database, Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 1.48 million shares worth $261.7 million. 

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Disclosure: None. 12 High Growth Financial Stocks To Buy is originally published on Insider Monkey.