3 Best Fintech Stocks for a Boosted Portfolio

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Rising interest rates and rising inflation mean you are looking for more opportunities to invest, perhaps in niche markets. Why not consider fintech, short for “financial technology”.

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If you’re still unsure of the meaning of the word, remember that it’s relatively new. In fact, interest in the word “fintech” itself didn’t even begin to grow until 2015, according to Deloitte, even though fintech companies “have been around” for over 20 years. However, many traditional financial services companies have stepped up to keep fintech in their sights.

Deloitte research shows that the growth of fintech startups increased from 2008 to 2010, but the number of companies entering the market doubled in the following two years. However, the number of FinTech companies changed in 2015 and decreased by 62%, with a downward trend in 2017. (Read more in Deloitte’s FinTech Development Report.)

Let’s go over the definition of fintech, just so we’re all on the same page, as well as several fintech stocks you might want to add to try and circumvent the daily news we all get about high inflation, rising interest rates and growing global tensions.

Why Buy Fintech Stocks?

At first, you may find it difficult to find an exact definition of fintech, as it refers to many different types of technologies that integrate technology into financial businesses. In fact, it can get a bit confusing as many businesses can cram into the fintech nest, including companies that do payment processing, online and mobile banking, online and peer-to-peer (P2P) lending. ), person-to-person payments and financial software and services.

Fintech technically refers to the integration of technology in the processing of money, digitization of money, digital financial services and easier access to credit. According to Fintech Magazine, embedded fintech will dominate the industry by 2030. This means that financial services will merge with other existing products. For example, Facebook Pay and Apple Card are two examples of mixed technologies. The site also mentions several areas where fintech will continue to evolve:

  • Fintech as a service
  • Hybrid cloud solutions
  • Enhanced cybersecurity fusion
  • Decentralized finance
  • Financial Assistants in Artificial Intelligence (AI)
  • High performance customer experience
  • Unseen ID
  • Exponential Computing Power
  • Sustainability efforts

Fintech offers an endless plethora of opportunities, and it may be worth taking a look at the different “branches” of fintech investing.

3 Fintech companies to watch

Ready to invest in fintech? Let’s see.

PayPal Holdings Inc. (NASDAQ: PYPL)

PayPal Holdings Inc., headquartered in San Jose, California, is a digital payments technology platform for PayPal, PayPal Credit, Braintree, Venmo, Xoom and Paydiant products. The company connects customers, including merchants and consumers, to payment transactions. Customers can use their accounts to purchase and pay for goods and transfer and withdraw funds. Consumers can also exchange funds with merchants using their bank accounts, PayPal account balances, PayPal credit accounts, credit and debit cards, or other stored-value products. Consumers can access its offerings through the PayPal website or mobile app, Venmo, and Xoom.

PayPal had strong reports for Q4 and year-end 2021, including the following:

In the fourth quarter, it recorded total payment volume (TPV) of $339.5 billion, up 23%, and net revenue of $6.9 billion, up 13%. The company added 9.8 million new net active accounts, including 3.2 million from the Paidy acquisition. Total payment volume reached $1.25 trillion, a growth of 33%. It had operating cash flow of $6.3 billion and free cash flow of $5.4 billion.

In fiscal 2022, the company grew $1.5 trillion and surpassed $29 billion and the total payment volume is expected to increase by 19% to 22%. Revenue is expected to grow 15% to 17% and GAAP EPS is expected to be between $2.97 and $3.15; Non-GAAP EPS is expected to be between $4.60 and $4.75 in 2022.

Green Dot Corporation (NYSE:GDOT)

Green Dot Corporation, headquartered in Texas, is a fintech and bank holding company in the United States. The company offers the following segments and services:

  • Consumer services
  • B2B services
  • Money Movement Services
  • Deposit account programs
  • Network Branded Reloadable Prepaid Debit Cards
  • Network Branded Gift Cards
  • Secured credit cards
  • Fund processing services
  • Cash transfer services
  • Simply Paid Disbursement Services
  • Tax processing, including tax refund transfers
  • Small Business Loans to Independent Tax Preparation Providers
  • Quick cash advance

Green Dot markets its products under the Green Dot, GoBank, MoneyPak, TPG and other brands. Green Dot Corporation markets and sells its products and services through retail stores, mobile applications and various direct-to-consumer channels, such as online SEO, online displays, direct mail campaigns, mobile advertising and affiliate referral programs.

Total operating revenue under generally accepted accounting principles (GAAP) was $330.8 million in the fourth quarter of 2021, compared to $284.3 million in the fourth quarter of 2020, representing an increase of 16 % year over year. GAAP net loss was $10.5 million for the fourth quarter, compared to a net loss of $24 million for the fourth quarter of 2020.

Total non-GAAP operating revenue was $321.2 million for the fourth quarter of 2021, compared to $274.5 million in the fourth quarter of 2020, a 17% year-over-year increase on the other. Adjusted EBITDA1 was $34.4 million, or 10.7% of total non-GAAP operating revenue for the fourth quarter of 2021, compared to $34.8 million, or 12.7% of operating revenue. non-GAAP operating totals for the fourth quarter of 2020.

Upstart Holdings Inc. (NASDAQ: UPST)

Upstart Holdings Inc., headquartered in San Mateo, Calif., is a cloud-based artificial intelligence (AI) lending platform that aggregates consumer loan demand and connects to banking partners AI compatible. Upstart’s platforms connect to consumers, banks and institutional investors through its AI lending platform.

Total revenue was $305 million in the fourth quarter, a massive 252% increase over the fourth quarter of 2020. Fee revenue was $287 million, an increase of 240% year over year.

Upstart’s banking partners issued 495,205 loans, which totaled $4.1 billion, up 301% from last year. Operating profit was $60.4 million, compared to $10.4 million a year ago, and GAAP net profit was $58.9 million, compared to $1 million in the fourth quarter 2020. Adjusted net income was $87 million, compared to $5.4 million, and GAAP diluted earnings per share was $0.61.

Upstart’s total revenue in 2021 was $849 million, a 264% increase over 2020, and total fee revenue was $801 million, a 251% year-over-year increase. the other. Banking partners provided 1.3 million loans totaling $11.8 billion, up 338% from the previous year.

Consider Fintech stocks for a tech boost

If you want a tech boost in your portfolio and don’t want to rely on pure tech, consider adding fintech. The opportunities abound, and as you probably don’t need to be reminded, you want to launch as much as possible at ground level.