We recently compiled a list of 10 Best Fintech Stocks to Buy in 2024.In this article, we’ll take a look at where Fiserv, Inc. (NYSE:FI) stacks up against other fintech stocks.
Based on a collaboration between the World Economic Forum and the Cambridge Center for Alternative Finance, a report found that the global fintech sector has been strong post-pandemic, with average global customer growth rates above 50% between 2021 and 2022. In this growing market, fintechs offer tailor-made financial services and products to underserved segments of the population. These segments represent a significant portion of the consumer base of fintech companies operating in both advanced economies and emerging and developing markets.
For the second year in a row, as CNBC reports, payments are the largest industry segment with a 24% share, although it is highly fragmented with many companies moving money around the world. Alternative financing, which includes crowdfunding apps and online lenders, follows with a 16% share. Other segments and their relative shares include 14% neo-banking, 12% wealth management technology, 10% business process solutions, 10% banking solutions, 8% financial planning and 6% digital assets . Nationally, the United States is the largest fintech market, home to 46% of the top 250 fintech companies. Meanwhile, the UK hosts 12% while India is home to 4% of these businesses. India has replaced Germany and France due to its growing digital adoption.
In today’s industry landscape, fintech companies at the lower end of the scale appear to be better off. Previously, the CEO of Bank of America said that the consumer was very stable and not getting worse. On the contrary, Daniel Pinto, chief operating officer of JP Morgan Chase, warned that net interest income would be difficult next year, with expected Fed rate cuts on the horizon. Ally Financial’s chief financial officer cited worse conditions as its borrowers face a weak job market as a growing concern other than inflation.
In an interview with CNBC, Dan Dolev, senior fintech equity research analyst at Mizuho, highlighted the growing consumer credit concerns. According to him, fintech players, more exposed to low-income consumers, are doing better. He mentioned that low-end consumers had a lot of money that they were spending beyond their means. These consumers reduced their spending to repay their loans after exhausting their savings 6 or 12 months ago. Meanwhile, prime consumers now face the same pressure as subprime consumers did several months ago.
Our methodology:
In order to compile a list of the 10 best fintech stocks to buy in 2024, we first used relevant stock screeners and ETFs to compile an extensive list of relevant companies with the highest market caps. Next, we selected the top 10 stocks from our list that had the largest number of hedge fund holders. The 10 best fintech stocks to buy in 2024 have been ranked in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey, we’re obsessed with the stocks hedge funds are piling into. The reason is simple: our research has shown that we can outperform the market by imitating the stocks selected by the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
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Number of hedge fund holders:73
Fiserv, Inc. (NYSE: FI) is a leading global provider of payment technology and financial services solutions. The company enables money movement for financial institutions, individuals and businesses. It was in 1984 that First Data Processing and Sunshine State Systems merged to create a national data processing organization focused on the financial services industry, Fiserv. The company went public in 1986 and has grown over the years to become a Fortune 500 company. The company’s reportable segments include Merchant Solutions and Financial Solutions.
With more than 6 million merchant sites worldwide and more than 25,000 financial transactions per second at peak, Fiserv, Inc. (NYSE: FI) has 40 years of experience in financial technology and payments. With its integrated solutions, strong customer base and strategic positioning, the industry’s leading position remains strong. This is evident from another year of double-digit organic growth in revenue and adjusted earnings per share for Fiserv. The global growth doesn’t stop there as the company recently launched its merchant acquiring pilot services in its newest market, New Zealand, and continued to expand its instant payment transactions in Brazil and Argentina.
The company delivered strong performance across its business in the second quarter of the year. With growth of 6% in the financial solutions segment and 9% in the merchant solutions segment, the fintech saw a 7% year-over-year increase in adjusted revenue. Adjusted earnings per share also increased in the second quarter and first half of 2024 compared to the prior-year periods. As such, the company raised its adjusted earnings per share outlook for the full year 2024 based on a strong first half. Other highlights of the quarter include new customers in verticals such as oil, gaming, government and healthcare, as well as major wins in the form of a strategic outsourcing deal with Verizon and a partnership with Apple to enable the new Apple Pay functionality with two of its next-generation solutions.
The stock was held by 73 hedge funds as of the second quarter of 2024. Harris Associates was the company’s largest shareholder. Therefore, Fiserv, Inc. (NYSE:FI) is one of the best fintech stocks to buy in 2024.
global FI ranks 6th on our list of the best fintech stocks to buy. While we recognize the potential of IF as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold more promise in terms of higher returns in a shorter time frame . If you’re looking for a deeply undervalued AI stock that’s more promising than FI but trading at less than 5x earnings, check out our report on cheapest AI stock.
