A decent increase in demand for credit and financial transactions on the back of a rapid economic recovery has propelled the financial services sector to a strong rebound this year. So, we think it could be wise to invest in fundamentally sound financial stocks Jack Henry & Associates (JKHY), Santander Consumer USA (NYSE:SC), SEI Investments (SEIC), and Janus Henderson Group (NYSE:JHG). They are each well-positioned to benefit from the increasing financial transactions and capital market activities. So, let’s examine these names.The financial services industry was among the severely impacted industries last year as weak credit demand, low interest rates, and diminished economic activity reduced the revenues of most industry participants. However, the industry is rebounding solidly due to increasing investor participation in the capital markets.
Last week, the major market indices hit fresh all-time highs as the Fed Chairman Jerome Powell hinted that an interest rate hike is highly unlikely in the near term. Though this announcement may not be favorable to the financial services sector, rising financial transactions with economic activities returning to pre-pandemic levels should boost the industry’s growth. Furthermore, the federal government’s efforts to relax some capital and liquidity requirements to help accelerate lending should support the industry’s recovery.
With these factors in mind, we believe the shares of established financial companies Jack Henry & Associates Inc. (JKHY), Santander (MC:SAN) Consumer USA Holdings Inc. (SC), SEI Investments Company (NASDAQ:SEIC), and Janus Henderson Group plc (JHG), which have been witnessing strong momentum lately, could be solid bets now.