Financials: 3 Stocks to Buy with $200

Financial stocks cover a wide range of companies involved in the financial industry. Under this umbrella, you’ll find banks, lenders, insurers, payment networks, financial services, mortgage REITs (Real Estate Investment Trusts), digital currency products, and even SPACs (Special Purpose Acquisition Companies). Finance is at the core of the stock market, which means there’s more room for profit. For individuals who are hesitant to invest in individual finance equities, there are numerous financial-themed exchange-traded funds (ETFs).

When the economy is doing well, financial stocks tend to do well too, but a decreasing financial sector might indicate a failing economy. Mortgages and loans give a large amount of money to the financial industry, allowing companies to thrive in a low-interest rate environment. After an impressive rally in the first eight months of this year, Wall Street has been beset by volatility in September. Investors’ confidence was shaken by increasing pandemic concerns, slower economic growth, rising inflationary pressures, and the Fed’s hint that its quantitative easing program, or taper, maybe showing itself sooner than later.

The fundamentals of the US economy, on the other hand, have remained strong, and the market’s general trend is positive. The cost of money will rise as the risk-free market interest rate rises, allowing financial businesses in particular to expand the difference between longer-term assets, such as loans, and shorter-term liabilities, enhancing the sector’s profit margin.

Let’s tackle just a few of these insurance stocks from the Financial sector that, according to economists, are smart picks for your growing portfolio:

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MetLife Inc. (MET)

Individual and institutional clients are served by MET, which offers insurance and financial services. Individuals can get life insurance, annuities, car and house insurance, and retail banking services, as well as group insurance, reinsurance, and retirement and savings products and services. MET is doing well in terms of smart underwriting and cost control. MET has positioned itself with high-growth activities as a result of business restructuring over the years. It will continue to concentrate on businesses with high growth potential, while repairing or exiting operations that do not provide value.

For the current year, MET‘s projected earnings growth rate is 29.6%. They report quarterly earnings again on November 3rd, but have shown impressive numbers for the current quarter thus far, not to mention beating the previous earnings report’s projections. MET boasts an EPS (Earnings-per-share) of $1.66 per share and $16.2 Billion in revenue. Something else to keep in mind is their dividend yield of 3.06%. MET has a consensus price target of 70.00 among analysts that provide 12-month price estimates, with a high of 75.00 and a low of 66.00. The median estimate is up 13.27% from its current price, and the consensus among experts is to buy shares of Metlife stock.

Markel Corp (MKL)

Markel Corp. (MKL) is a financial holding company that specializes in unique insurance underwriting for a range of niche industries. It operates internationally, and is divided into two sections: Insurance and Reinsurance. All direct business placements written within MKL‘s underwriting activities are included in the Insurance section. All treaty reinsurance written under the company’s underwriting activities is included in the Reinsurance section. Samuel A. Markel started the firm in 1930, and it is based in Glen Allen, Virginia. MKL aims to expand through acquisitions and organic efforts, which broaden and deepen its portfolio while also expanding its international reach.

MKL’s last earnings report beat expectations in the revenue department, and their year-over-year numbers are strong. They report again on November 2nd, but in the meantime, boast an EPS of $14.04 per share. Their sales for the current quarter are $2.7 billion. Although MKL doesn’t currently pay a dividend, its stock is sturdy, and they have an expected earnings growth of over 100% for the year. The consensus price target for MKL from analysts who provide 12-month predictions is 1,400.00, with a high of 1,450.00 and a low of 1,350.00. From the current price, the consensus forecast implies a 16.26% gain. The consensus among analysts gives MKL a strong buy rating.

American Financial Group Inc. (AFG)

American Financial Group, Inc. (AFG) is a holding company for insurance companies. It sells fixed and fixed-indexed annuities in the retail, financial institutions, and education markets, as well as property and casualty insurance, with an emphasis on commercial solutions for companies. Carl Henry Lindner Jr. started the firm in 1959, and it is based in Cincinnati, Ohio. Startups, small-to-medium-sized acquisitions, and product launches are all areas where AFG is active. Growth should be fueled by improved industry fundamentals, and strong ratios. AFG can invest money effectively since it has a strong capital position.

One of several things that make AFG a standout is its strong dividend yield of 18.9%. Like the other two I’ve mentioned, it reports earnings again in early November, but has also shown strong numbers in the meantime. It’s year-over-year financials are all solid, with growth in revenue, EPS, net income, profit margin, and so on. The analysts’ outlook bodes well for AFG on both an annual and quarterly basis, and growth is expected in all areas. The consensus price target for AFG from analysts that provide 12-month predictions is 145.00, with a high of 148.00 and a low of 142.00. The consensus estimate implies an increase of 14.92% from the current price. The analysts agree that you should buy shares of AFG.