Financial institutions play a crucial role in the modern economy, providing a wide array of services including lending, investment management, risk mitigation, and payment processing. However, recent fluctuations in fiscal and monetary policy have created a somewhat subdued environment, limiting growth within the industry. Over the past six months, the financial sector has experienced gains of 8.7%, a performance that lagged behind the S&P 500’s more robust 13.3% increase. Despite this performance, certain companies within the sector continue to demonstrate potential for earnings growth. StockStory was created to identify these promising opportunities. This article highlights two financial stocks that we recommend selling, alongside one that we believe presents a compelling investment case.
Two Financial Stocks to Sell: State Street (STT)
State Street (NYSE:STT), with a market capitalization of $36.93 billion, boasts a history stretching back to 1792, initially centered around Boston’s Long Wharf and its significance as a global shipping and trade hub. Today, the company provides custody, investment management, and related financial services to a diverse clientele, including institutional investors such as pension funds, asset managers, and central banks across the globe.
However, several factors lead us to a cautious outlook on State Street’s performance. The company’s substantial revenue base has not translated into accelerated growth, with annual revenue increasing by only 3.1% over the past five years. This growth rate fell short of that of other financial companies within the sector. Earnings per share for State Street also lagged its competitors, growing by only 7.3% annually over the same period. As of its current stock price of $131.65, State Street trades at a valuation ratio of 11.8x forward P/E.
OneMain (OMF) – A Concern
OneMain Holdings (NYSE:OMF), previously known as Springleaf, carries a market capitalization of $8.12 billion. The company specializes in providing personal loans, auto financing, and credit cards primarily to nonprime consumers who may have limited access to traditional banking services.
Despite its focused market segment, OneMain Holdings is not currently generating excitement among investors. The company’s annual revenue growth over the last five years has been modest at 4.3%, slower than the performance of broader financial companies. Earnings growth over the same period has also been constrained, with earnings per share increasing by just 3.4% annually – a figure below the average for its peers. The company’s current stock price of $68.88 represents a valuation ratio of 9.1x forward P/E. In addition, its debt-to-equity ratio of 6.6x indicates a relatively high level of leverage, increasing the potential risk of bankruptcy.
Blackstone (BX) – A Strong Investment
Blackstone (NYSE:BX), with a market capitalization of $121.8 billion, represents a significantly stronger investment opportunity within the financial sector. This global alternative asset manager manages over $1 trillion in assets across real estate, private equity, credit, and hedge funds, investing capital on behalf of pension funds, sovereign wealth funds, and other institutional investors.
Blackstone’s strategy demonstrates impressive results. The company has experienced annual revenue growth of 19.2% over the last five years, reflecting increasing market share. Fee-related earnings improved by 22.7% annually over the past five years, largely due to the elimination of redundant costs. Earnings per share grew by 19.7% annually, substantially exceeding the average growth rate of its peers. Currently trading at $155.91 per share – or 25.2x forward P/E – Blackstone presents a compelling valuation.
Beyond Individual Stocks: Opportunities for Growth
Investors should recognize that past performance doesn’t guarantee future success. The risk of overexposure to heavily crowded stocks is a growing concern. Identifying the next wave of substantial growth companies is critical for building a resilient portfolio. StockStory has compiled a curated list of high-quality stocks that have generated considerable returns. The top 9 market-beating stocks, identified as of June 30, 2025, include established names such as Nvidia (+1,326% between June 2020 and June 2025) and Kadant (+351% five-year return), alongside smaller-cap businesses. Finding your next big winner with StockStory today is a strategic step.