2013 saw the S&P 500 have its biggest gains in 16 years, posting over a 30 percent return. Analysts are understandably a little bearish on the market, and Financials specifically, coming off such a banner year. But that doesn’t mean there aren’t large Financial plays worth looking into.
We decided to find every financial stock play we could that, as of Januray 1, was valued at over $10 billion total and had an analyst consensus of “strong buy” – the hioghest possible consensus rating.
We found eight plays that fit that criterion. Interestingly, not a single one is an American company, but all trade on the American market:
1) HDFC Bank Ltd. (HDB)
P/E Ratio: 22.08
While the Indian financial sector was pummeled in 2013, a couple institutions have already showed signs of bouncing back, notably HDFC. The company has been praised by Indian analysts in the latter half of 2013, and as the Reserve Bank of India seeks to turn the country around HDFC looks like a promising candidate to lead the charge.
2) ICICI Bank Ltd. (IBN)
P/E Ratio: 20.93
Right behind HDFC is ICICI, another major Indian bank that has scored high marks from analysts in India and America. ICICI has been notably aggressive branching into “underbanked” parts of India, and serving millions of customers who had heretofore been denied access to modern bank amenities.
3) ING Groep NV ($ING)
P/E Ratio: 18.95
This Dutch multinational holding company might not be a household name in the States, but they’re one of the largest financial institutions in the world. The well-diversified company, who counts life insurance as their primary business, had a very respectable 2013, gaining 44 percent in value on the year.
4) KB Financial Group, Inc. (KB)
P/E Ratio: 15.61
The holding company of South Korea’s largest bank, and clocked an impressive $26.5 billion in revenue in FY 2012. KB had a relatively tame 2013, only gaining 6.79 in value. But projections are bullish, both for the company and the rapidly developing Korean economy, keeping analysts intrigued with this bank play.
5) Lloyds Banking Groups plc (LYG)
P/E Ratio: 131.50
If Lloyds worrying profit-to-earnings ratio seems counterintuitive to its high marks from analysts, keep in mind that Lloyd’s has long carried a hefty amount of toxic assets from the 2008 crisis. The bank, which is partially owned by the UK government, has begun spinning those loans off, and once the spun off bank (called TSB) becomes fully independent in 2014, Lloyds will remove a rather large albatross that has been around their neck for years.
6) Prudential plc ($PUK)
P/E Ratio: 21.15
This UK company can trace its roots back to London in 1848, when it was formed as a loan provider. The company has grown to become a $56 million market cap behemoth that spans several aspects of the Financial market. Prudential had a very successful year in 2013, notching 54.25 percent in gains.
7) Shinhan Financial Group Company Limited (SHG)
P/E Ratio: 12.95
The oldest bank in South Korea, Shinhan sports strong fundamentals, including a very low P/E ratio of 12.95 and an even better forward P/E of just over 10. The company also sports a price target that is 20 percent higher than its current valuation, signaling a bright future for Shinhan.
8) Sumitomo Mitsui Financial Group Inc. (SMFG)
P/E Ratio: 9.11
This Japanese financial company sports a very low P/E, and has consistently upended anlayst expectations. With a consensus of "strong buy" that's saying something indeed. The lone Japanese entry on the list, Sumitomo offers one of the few Japanese financial plays in recent memory to get such high marks from American analysts.