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Adding to the positives, the Federal Reserve has hinted at raising interest rates as soon as late 2023, a year earlier than originally anticipated, which should help financial companies expand their profit margins. Furthermore, the sector is expected to grow with the ongoing digital transformation. According to The Business Research Company, the global financial services market is expected to grow at a 9.9% CAGR to $22.5 trillion in 2021.
With these factors in mind, we believe established financial companies Capital One Financial Corporation (NYSE:COF), KeyCorp (KEY), Ally Financial Inc. (ALLY), and OneMain Holdings, Inc. (OMF) could be solid bets now. They are currently trading below their 52-week highs, but we think have plenty of upside to deliver.
