Financial institutions play a critical role, offering everything from consumer banking to wealth management and specialized financial solutions. But uncertainty about fiscal and monetary policy has tempered enthusiasm, limiting the industry's gains to 13.2% over the past six months. This return lagged the S&P 500's 21.3% climb.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here is one financials stock boasting a durable advantage and two we’re steering clear of.
Two Financials Stocks to Sell:
Interactive Brokers (IBKR)
Market Cap: $31.89 billion
Founded in 1977 and known for its sophisticated trading technology and global reach across 150+ exchanges in 34 countries, Interactive Brokers (NASDAQ: IBKR) is a global electronic broker that provides low-cost trading and investment services across stocks, options, futures, forex, bonds, and other financial instruments.
Why Is IBKR Not Exciting?
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Interactive Brokers is trading at $71.60 per share, or 31.5x forward P/E. Dive into our free research report to see why there are better opportunities than IBKR.
Sixth Street Specialty Lending (TSLX)
Market Cap: $2.06 billion
Originally launched as TPG Specialty Lending before rebranding in 2020, Sixth Street Specialty Lending (NYSE: TSLX) is a business development company that provides customized financing solutions to middle-market companies across various industries.
Why Do We Avoid TSLX?
- Annual revenue growth of 5.4% over the last two years was below our standards for the financials sector
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 3.3% annually while its revenue grew
Sixth Street Specialty Lending’s stock price of $21.85 implies a valuation ratio of 3.4x forward price-to-sales. Check out our free in-depth research report to learn more about why TSLX doesn’t pass our bar.
One Financials Stock to Buy:
Hamilton Lane (HLNE)
Market Cap: $5.45 billion
With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ: HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.
Why Are We Backing HLNE?
- Annual revenue growth of 22.1% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 28.4% over the last two years outstripped its revenue performance
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $123.98 per share, Hamilton Lane trades at 22.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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