6 Fintech Stocks To Buy On The Dip

It turns out that Fintech (financial technology) is a war zone now. I found six Fintech stocks to buy on the dip. These stocks are down significantly from their highs, yet all of them are profitable. They are all cheap now on a P/E basis, and all of them, except one…

pay dividends.

That presents a unique buying opportunity for the likely survivors. This article will dive into some of the more probable winners.

You can see from the chart on the right that the average P/E of these fintech stocks has a price-to-earnings (P/E) multiple of 8.3x. Most of the companies have lower earnings projections for 2023, so the P/E falls for 2023 to 7.7x.

Moreover, the average dividend yield for this group of fintech stocks is over 4%. That makes them quite interesting to value investors.

This is a higher than average dividend yield than most other stocks. This is also one more reason to buy these fintech stocks on the dip.

Let’s dive in and look at these stocks.

UPST Upstart Holding $24.42
OMF OneMain Holdings $39.05
SLM SLM Corporation $15.7
NNI NelNet Inc $89.93
NAVI Navient Corp $14.9
WU The Western Union Company $16.35

Upstart Holdings (UPST)

Market Cap: $2.13 billion

Upstart Holdings (NASDAQ:UPST) runs an AI (artificial intelligence) based lending referral platform essentially sending borrowers to various banks and loan partners and collecting a fee. This makes the company very profitable.

For example, analysts now forecast that its earnings per share (EPS) will hit $1.48 in 2022 and rise 43% in 2023 to $2.18per share. That lowers its P/E multiple down to 10.7x from over 15.4x in 2022.

This more than makes up for the fact that the company does not pay a dividend. All the other fintech stocks on this list pay good dividends to their shareholders.

OneMain Holdings (OMF)

Market Cap: $4.18 billion

OneMain Holdings (NYSE:OMF) is a financial lender and an insurance company that makes loans to lower credit quality borrowers and for auto loans. The company is extremely profitable and is likely to continue to be, recession or not.

Analysts forecast earnings this year of $8.60 per share, and just slightly lower at $8.54 next year. This puts OMF stock on a very low forward P/E multiple of just 4.4x for both years.

Moreover, the company pays a dividend of $3.80 per share, so earnings still cover it very well. Its payout ratio is reasonable at just 44%. More importantly, its dividend yield, is 10%. This looks sustainable as long as earnings stay level next year.

This makes OMF stock one of the best fintech stocks to buy on the dip going forward.

SLM Corporation (SLM)

Market Cap: $4.21 billion

SLM Corporation (NASDAQ:SLM) makes and services private education loans and offers traditional banking products like saving accounts to its customers. The company is now very profitable and analysts forecast rising 5.9% from $2.87 in 2022 to $3.04 in 2023.

That puts the stock at today’s price (July 14) of $15.47 on a low P/E of just 5.4x, falling to 5.1x for the 2023 earnings year. This is very cheap indeed and seems to reflect market fears about declining earnings, which so far are not in analysts’ forecasts.

Moreover, its dividend of 44 cents is more than covered by earnings, as you see. This gives the stock an attractive 2.84% dividend yield.

Analysts surveyed by TipRanks now project that SLM stock is worth $20.71, or +33.9% over today’s price. That makes it one of the best fintech stocks to buy on the dip on this list.

NelNet Inc (NNI)

Market Cap: $3.37 billion

NelNet Inc (NYSE:NNI) is a loan servicing and payment processing company with inbound call centers and software sales to independent lenders and funds management companies. Its business is very profitable as well.

For example, analysts now forecast earnings will hit $7.09 this year and stay basically level next year. As a result, at today’s price of $89.77, the stock is at 12.2x earnings.

Moreover, its earnings more than cover the…

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