Do you have $5000? 3 Top Financial Stocks to Buy Long-Term
AAs we approach the end of summer and prepare for fall, now is a good time to take a look at your portfolio and think about long-term opportunities you can invest in before the end of the year. The decline in the market this year means there are plenty of attractive investments trading at attractive levels, providing attractive entry points for long-term investors.
The financial sector is a great place to look, and you can spread a $5,000 investment between these companies and own three blue chip stocks with strong companies, attractive valuations and attractive dividend payments, all operating in different segments of the financial industry.
1. Blackstone Group
Although you may not be an institutional investor or a high net worth individual who can invest in any of the Blackstone Group (NYSE:BX) offers or funds, it doesn’t mean you can’t benefit from investing money in Blackstone stock. Shares of this leading alternative asset manager with over $940 billion in assets under management look like a compelling buy these days, trading around 30% below their 52-week high with a yield in dividends of more than 4.5%.
As an alternative asset manager, Blackstone invests in asset classes that are difficult for the average retail investor to access, such as real estate and private equity. So I like that Blackstone shares give you exposure to these types of investments under one roof. roof. Blackstone’s holdings include thousands of single-family homes in the United States, a stake in the Great Wolf Lodge chain of water parks and resorts, and stakes in leading consumer brands. Blackstone is also in the acquisition process listed on the stock exchange REITs American university communitieswhich focuses on student accommodation, and privatizes it.
An investment in Blackstone is also a thematic play on a simple but major tailwind. In the past, large institutional investors often allocated 5% of their money to alternative managers, whereas today many have allocations of 25%. President and CEO Bruce Flatt of Brookfield Asset Management (NYSE:BAM) – a competitor to Blackstone – notes that in an environment of low growth and low interest rates, that number could rise to 50% or more as large institutional investors look for new places to earn above-market returns.
Blackstone certainly appears to be riding on that momentum, with $88 billion in capital inflows in the second quarter of 2022 (its second highest quarter ever) and a whopping $340 billion during the year. elapsed. That would mean trillions of dollars in inflows for Blackstone and its fellow alternative managers, resulting in more assets under management, more fees, more revenue and more returns for shareholders.
2. Goldman Sachs
Shares of an iconic investment bank Goldman Sachs (NYSE:GS) look like serious business right now, trading at just 7.5 times earnings, its cheapest review in years. Shares are down 12% year-to-date, and the main concern seems to be that market volatility has depressed initial public offerings and mergers and acquisitions, the bread and butter of Goldman’s business. But at some point the market will heat up again and Goldman is in pole position to capitalize. At the same time, Goldman Sachs is also more diverse today than it was in the past, with a growing consumer business that CEO David Solomon aims to grow from $1.5 billion to $4 billion. billion dollars in revenue by 2024.
Meanwhile, Goldman Sachs is paying a dividend yield of almost 3%. The company recently increased its payout from $2 per quarter to $2.50 per quarter for the dividend it will pay in August. The quarterly payout is now double what it was in 2021, making Goldman Sachs an exciting dividend growth stock.
3. T. Rowe Award
As a traditional asset manager, T price. Rowe (NASDAQ: TROW) may not be as exciting as Blackstone or Goldman Sachs in terms of the market segments it is involved in. But what’s exciting is its long-term performance history, its leading position in the market in retirement and mutual funds, and the distribution of dividends that it has been increasing for 36 years, making it a Dividend Aristocrat. This dividend is currently yielding almost 4%.
Shares of the 85-year-old asset manager are down 37% this year as the stock market decline has led to lower assets under management as well as cash outflows as clients pull money out of the market. But it also gives investors the opportunity to start a position in this blue chip company at an attractive valuation of just 12 times earnings. As the market rebounds, T. Rowe Price will be a key beneficiary as AUM accumulates and capital returns.
Put $5,000 to work in finance
Taking a few thousand dollars and putting it to work in this diverse basket of financial stocks will give you exposure to exciting segments of the market ranging from private equity to investment banking to asset management. You’ll own world-class companies that are at the top of their respective fields at reasonable valuations, and all of them will pay you a steady stream of above-market dividends.
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Michael Byrne holds positions within the T. Rowe Price Group. The Motley Fool holds positions and recommends Brookfield Asset Management, Goldman Sachs and The Blackstone Group Inc. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.