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The year 2024 holds a promising future for emerging fintech stocks. As the financial sector undergoes a profound digital overhaul, key players in payments and credit processing are poised to benefit. It is clear that the fintech leaders are not new, and you’ve probably already heard of them before.
These companies monopolize new and existing financial technology infrastructure, and their leverage in the marketplace is unprecedented. Investors can also look forward to fintech’s ability to penetrate cross-border transactions and lift millions of people out of poverty. However, just the simple access to a payment system will be consequential with time and space. Mckinsey and Company estimates fintech revenue to grow 3X faster than the banking sector from 2023 – 2028. This is great news for fintech giants who are diversifying into emerging markets like Brazil, India, and Mexico.
Now, let’s discuss the 3 best fintech stocks to buy before the new year!
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Mastercard (MA)
Source: Chart by Josh Enomoto
Mastercard (NYSE:MA) is an American multinational payment giant and the second-largest payment processing company globally. The stock is up more than 20% YTD, and Mastercard’s long-term outlook is strong.
One key factor contributing to Mastercard’s appeal is its consistent double-digit revenue growth. Mastercard has demonstrated an ability to drive YOY growth and return cash to shareholders. In Q3 2023, total revenue rose 14% YOY to $6.5 billion. GAAP Earnings Per Share also grew 31%, with operating margin remaining robust at 58.8%. The company has benefited from higher interest rates in 2023, driving profitable growth. But what makes Mastercard a special fintech stock to buy is its ability to return cash to shareholders. The company repurchased 19.2 million shares and distributed $1.6 billion in dividends to shareholders.
American Express (AXP)
Source: shutterstock.com/whiteMocca
American Express (NYSE:AXP) has had a strong 2023 fiscal year driven by higher interest rates. Total card member spending grew 7% YOY, with travel and entertainment categories boosting consumer spending.
Despite tightening financial conditions and higher consumer debt levels, American Express’ credit profile has shown increased resilience. In Q3 2023, the company reported its sixth consecutive quarter of revenue growth. Earnings Per Share also saw robust growth, as they have strengthened their value proposition for their Millenial and Gen Z customers.
Net income saw strong growth of 30% YOY, suggesting their plan has been driving higher profitability. With a forward P/E of 14.75, American Express seems cheaper than its competitors. Investors might consider this fintech stock a sound investment choice through 2028.