Best mega-cap financial stocks to invest in Q3 2024

The financial sector underpins global commerce, driving economic growth and facilitating financial security. Mega-cap financial stocks offer established players with the resources to navigate the ever-changing economic landscape.

This article explores the top mega-cap financial stocks poised for success in Q3 2024. We'll delve into industry giants like JPMorgan Chase, a leading global investment bank. We'll also examine the diverse offerings of companies like Berkshire Hathaway, a holding company with significant financial service interests. Additionally, we'll explore payment processing powerhouses like Mastercard. This selective group showcases the strength and stability of mega-cap financials.

Are you ready to explore these financial leaders and their potential for Q3 2024? Dive deeper and discover insightful analysis to inform your investment decisions and build a robust financial-focused portfolio!

Roboforex R-Trader gives you access to over 10,000 stocks, ETFs, commodities, and crypto. All of the stocks mentioned in this article are available for purchase there.

Before we dive into each company, let`s take a look at how your investment would have performed if you had invested in top 10 stocks mentioned in this article 5 years ago.

Now, let`s take a closer look at each of the companies:

  • JPMorgan Chase (JPM)

    JPMorgan Chase & Co. needs little introduction. It's a behemoth in the financial world, consistently ranking as the largest bank in the United States and one of the biggest globally by market capitalization. Founded in 1799 and headquartered in New York City, JPMorgan Chase is a financial powerhouse that wears many hats. Forget about a niche corner of finance; they're a full-service financial conglomerate. They provide a wide range of financial services, including consumer banking, investment banking, commercial banking, asset management, and treasury services.

    JPMorgan Chase financial statements

    Analysts recommendation: 1.81

    Financial Health

    • Return on assets (ROA): 1.28%
    • Return on equity (ROE): 15.65%
    • Return on investment (ROI): 6.31%

    Profitability

    • Gross margin: N/A
    • Operating margin: 25.24%
    • Net profit margin: 19.18%

    Growth

    • EPS (past 5 years): 12.53%
    • EPS (current): 16.56
    • EPS estimate (next quarter): 5.88
    • EPS growth (this year): 6.57%
    • EPS growth (next year): -2.16%
    • EPS growth (next 5 years): 1.2%
    • EPS growth (quarter-over-quarter): 8.33%
    • Sales growth (past 5 years): 14.88%
    • Sales growth (quarter-over-quarter): 18.17%

    💡 Why invest in JPMorgan Chase?

    JPMorgan Chase's dominant position in the financial sector offers several potential advantages for investors seeking exposure to this critical industry:

    • Essential Financial Services: From everyday banking to complex financial transactions, JPMorgan Chase provides services that are fundamental to the global economy.
    • Diversified Revenue Streams: Their various business lines offer a hedge against economic downturns that might impact specific sectors.
    • Strong Brand Reputation: JPMorgan Chase is a trusted household name, attracting a loyal customer base and potentially commanding premium pricing for services.
    • Global Presence: Operating in over 100 countries allows them to benefit from growth opportunities in emerging markets.

    🐌 Key considerations before investing in JPMorgan Chase

    However, before investing in JPMorgan Chase, it's crucial to consider the potential challenges:

    • Regulation: As a major financial institution, JPMorgan Chase is heavily regulated, and changes in regulations could impact their profitability.
    • Economic Downturns: Economic downturns can lead to loan defaults and decreased investment banking activity, impacting JPMorgan Chase's earnings.
    • Competition: The financial services industry is fiercely competitive, with established players and nimble fintech companies vying for market share.
    • Cybersecurity Threats: The security of JPMorgan Chase's vast financial systems is paramount, and any data breaches could be catastrophic.

    Final thoughts on JPMorgan Chase

    JPMorgan Chase's strong brand, global reach, diversified business model, and essential financial services paint a promising picture for long-term investors seeking a comprehensive exposure to the financial sector. However, the regulatory environment, economic sensitivity, competition, and cybersecurity threats necessitate careful consideration. Thorough research on JPMorgan Chase's strategies for navigating these challenges, a comparison with other financial institutions based on your investment goals, and a clear understanding of your risk tolerance are crucial before adding JPMorgan Chase & Co. to your portfolio. Remember, JPMorgan Chase is a major player in the financial markets, and their story could be a foundational investment in your journey. 

  • Berkshire Hathaway (BRK.B)

    Berkshire Hathaway Inc. is more than just a company; it's a legendary investment powerhouse led by the enigmatic Warren Buffett, also known as the "Oracle of Omaha." Forget traditional industry classifications; Berkshire Hathaway is a diversified holding company, a behemoth that owns a wide range of businesses and significant stakes in publicly traded companies. Imagine them as a maestro conducting a complex financial orchestra. Berkshire Hathaway doesn't manufacture products or directly offer services. Instead, they invest in a variety of established businesses across sectors like insurance, utilities, railroads, manufacturing, and consumer goods. Their portfolio boasts household names like Geico, Dairy Queen, and Duracell, alongside significant holdings in companies like Apple, Kraft Heinz, and American Express. This diversification and Buffett's legendary investment acumen have made Berkshire Hathaway a long-term investor favorite.

    Berkshire Hathaway financial statements

    Analysts recommendation: 2

    Financial Health

    • Return on assets (ROA): 7.1%
    • Return on equity (ROE): 13.65%
    • Return on investment (ROI): 10.62%

    Profitability

    • Gross margin: 20.12%
    • Operating margin: 13.94%
    • Net profit margin: 19.9%

    Growth

    • EPS (past 5 years): 93.53%
    • EPS (current): 33.88
    • EPS estimate (next quarter): 4.25
    • EPS growth (this year): 10.45%
    • EPS growth (next year): 3.14%
    • EPS growth (next 5 years): 23.3%
    • EPS growth (quarter-over-quarter): -63.8%
    • Sales growth (past 5 years): 8.34%
    • Sales growth (quarter-over-quarter): 5.24%

    💡 Why invest in Berkshire Hathaway?

    Berkshire Hathaway offers several potential advantages for investors seeking a diversified and potentially high-growth portfolio:

    • Legendary Leadership: Warren Buffett's track record of successful value investing is unmatched, attracting investors who trust his investment philosophy.
    • Diversified Holdings: Berkshire Hathaway isn't reliant on any single industry, mitigating risk and offering exposure to various sectors with growth potential.
    • Strong Financial Position: The company boasts a massive cash hoard, allowing them to capitalize on investment opportunities and navigate economic downturns.
    • Long-Term Investment Focus: Berkshire Hathaway takes a long-term approach to investing, potentially aligning well with your own investment goals.

    🐌 Key considerations before investing in Berkshire Hathaway

    However, before investing in Berkshire Hathaway, it's crucial to consider the potential challenges:

    • Leadership Transition: Warren Buffett is well into his 90s, and the future leadership of Berkshire Hathaway is uncertain. How the company navigates this transition will be critical.
    • Limited Liquidity: Class A shares (BRK.A) have an extremely high stock price, making them less accessible to most retail investors. Class B shares (BRK.B) offer more affordability but with less voting power.
    • Passive Investing Approach: While successful, Berkshire Hathaway primarily focuses on acquiring and holding existing businesses, not actively managing them. This might not appeal to investors seeking high-growth, disruptive technology companies.
    • Dependence on Key Businesses: The performance of Berkshire Hathaway is heavily tied to the success of its major holdings.

    Final thoughts on Berkshire Hathaway

    Berkshire Hathaway's legendary leadership, diversified holdings, strong financial position, and long-term focus paint a promising picture for investors seeking a well-rounded portfolio. However, the leadership transition, share class limitations, passive investment approach, and dependence on key businesses necessitate careful consideration. Thorough research on Berkshire Hathaway's past performance, their investment philosophy under potential new leadership, and a clear understanding of your risk tolerance and investment goals are crucial before adding Berkshire Hathaway to your portfolio. Remember, Berkshire Hathaway isn't just a company; it's a legacy of value investing, and a potential cornerstone for a well-diversified portfolio.

  • Mastercard (MA)

    Mastercard Incorporated, often stylized as Mastercard, isn't a bank you visit or a store you walk into. They're the invisible hand behind the scenes, greasing the wheels of global commerce. Founded in 1966 and headquartered in Purchase, New York, Mastercard is a giant in the payments processing industry. Forget issuing loans or managing accounts; Mastercard focuses on the core function of facilitating electronic payments between merchants and card-issuing banks. Imagine them as the universal translator of finance. Whenever you swipe your debit or credit card emblazoned with the Mastercard logo, Mastercard's secure network springs into action. They authorize the transaction, ensuring sufficient funds are available, and transfer the money electronically between the involved parties. Mastercard offers a wide range of payment solutions for consumers, businesses, and financial institutions, contributing significantly to the global shift towards cashless transactions. Their global reach and focus on innovative payment technologies position them as a key player in the ever-evolving financial landscape.

    Mastercard financial statements

    Analysts recommendation: 1.35

    Financial Health

    • Return on assets (ROA): 29.05%
    • Return on equity (ROE): 188.42%
    • Return on investment (ROI): 56.99%

    Profitability

    • Gross margin: 96.8%
    • Operating margin: 57.76%
    • Net profit margin: 46.05%

    Growth

    • EPS (past 5 years): 16.16%
    • EPS (current): 12.58
    • EPS estimate (next quarter): 3.52
    • EPS growth (this year): 16.53%
    • EPS growth (next year): 16.11%
    • EPS growth (next 5 years): 19.2%
    • EPS growth (quarter-over-quarter): 30.39%
    • Sales growth (past 5 years): 11.54%
    • Sales growth (quarter-over-quarter): 10.38%

    💡 Why invest in Mastercard?

    Mastercard's strong position in the payments processing industry offers several potential advantages for investors seeking exposure to this growing sector:

    • Essential for Modern Commerce: Electronic payments are becoming increasingly ubiquitous, making Mastercard's services crucial for businesses and consumers alike.
    • Global Reach: Mastercard operates in over 210 countries and territories, offering a vast and potentially growing market for their services.
    • Network Effect: The more merchants and cardholders that use Mastercard, the more valuable their network becomes, creating a potential competitive advantage.
    • Focus on Innovation: Mastercard actively invests in new technologies like contactless payments and digital wallets, staying ahead of the curve in the evolving payments landscape.

    🐌 Key considerations before investing in Mastercard

    However, before investing in Mastercard, it's crucial to consider the potential challenges they face:

    • Competition: The payments processing industry is fiercely competitive, with established players like Visa and emerging fintech companies vying for market share. Maintaining their technological edge and competitive fees will be crucial.
    • Regulation: The financial services sector is heavily regulated, and changes in regulations could impact Mastercard's operations and fees.
    • Cybersecurity Threats: The security of Mastercard's network is paramount, and any data breaches could damage their reputation and lead to financial losses.
    • Economic Downturns: Consumer spending typically declines during economic downturns, potentially impacting Mastercard's transaction volume.

    Final thoughts on Mastercard

    Mastercard's global brand recognition, vast network, focus on innovation, and established position in the growing digital payments sector paint a promising picture for long-term investors seeking exposure to this critical financial infrastructure. However, the competitive landscape, regulatory environment, cybersecurity threats, and economic sensitivity necessitate careful consideration. Thorough research on Mastercard's plans for navigating these challenges, a comparison with Visa, and a clear understanding of your risk tolerance are crucial before adding Mastercard Incorporated to your portfolio. Remember, in today's world, Mastercard is a key player in making money move, and their story could be a valuable addition to your investment journey.