Best mid-cap financial stocks to invest in Q1 2025

The financial sector offers numerous opportunities for investors seeking stable growth and resilience, and mid-cap companies often represent the perfect balance between reliability and upward potential. These firms play crucial roles in specialized financial services, helping to drive innovation and address unique market needs.

Mr. Cooper Group is a prominent player in the mortgage servicing and lending industry, excelling in customer-focused solutions for homeowners. Its expertise in managing mortgage portfolios positions it strongly amid fluctuating interest rates. StoneX Group, a global financial services firm, specializes in providing trading, hedging, and risk management solutions to businesses and institutions, offering access to diverse markets. CBIZ delivers essential financial, insurance, and advisory services to small and mid-sized businesses, showcasing consistent growth through its focus on client success and market expansion.

These mid-cap financial companies combine niche expertise with operational excellence, making them standout picks for investors looking to tap into the evolving financial landscape in Q1 2025. Explore our in-depth analysis to understand why they should be on your radar.

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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:

  • Mr. Cooper Group (COOP)

    The name Mr. Cooper might not ring a bell on the street, but behind the scenes of the American housing market, it plays a critical role. Mr. Cooper Group (COOP) isn't a flashy real estate agency; it's a comprehensive mortgage servicing and origination company. They help people achieve the dream of homeownership by guiding them through the mortgage process, from securing a loan to managing it over time. Mr. Cooper's reach extends far and wide. They service a vast portfolio of existing mortgages, ensuring homeowners make their monthly payments smoothly. Additionally, they originate new mortgages, helping aspiring homeowners navigate the complexities of securing a loan to purchase their dream home. But can Mr. Cooper Group translate its established presence and comprehensive mortgage services into rewarding returns for your investment portfolio? Let's explore the factors driving Mr. Cooper's growth, while acknowledging the potential market fluctuations to consider before joining this housing market expedition.

    Mr. Cooper Group financial statements

    Analysts recommendation: 1.78

    Financial Health

    • Return on assets (ROA): 3.45%
    • Return on equity (ROE): 11.43%
    • Return on investment (ROI): 3.91%

    Profitability

    • Gross margin: N/A
    • Operating margin: 40.14%
    • Net profit margin: 27.91%

    Growth

    • EPS (past 5 years): -11.06%
    • EPS (current): 7.74
    • EPS estimate (next quarter): 2.66
    • EPS growth (this year): 40.89%
    • EPS growth (next year): 26.58%
    • EPS growth (next 5 years): -3.69%
    • EPS growth (quarter-over-quarter): -69.95%
    • Sales growth (past 5 years): 3.13%
    • Sales growth (quarter-over-quarter): -38.34%

    💡 Why invest in Mr. Cooper Group?

    Several key factors make Mr. Cooper Group an attractive prospect for investors seeking exposure to the ever-evolving housing market:

    • Leader in Mortgage Servicing: Mr. Cooper boasts a leading position in the U.S. mortgage servicing industry, managing a massive portfolio of existing loans. This leadership translates into significant recurring revenue streams as homeowners make their monthly payments.
    • Origination Expertise: Beyond servicing, Mr. Cooper offers origination services, assisting prospective homeowners in securing mortgages. This dual approach allows them to capture a broader market share within the mortgage industry.
    • Focus on Technology: Mr. Cooper prioritizes leveraging technology to streamline the mortgage process, offering user-friendly online tools and a strong mobile app. This focus on innovation enhances the customer experience and potentially improves efficiency.
    • Strong Customer Focus: Mr. Cooper prioritizes building long-term relationships with homeowners, offering them various support resources and tools to manage their mortgages effectively. This customer focus fosters loyalty and potentially reduces churn.

    🐌 Key considerations before investing in Mr. Cooper Group

    While Mr. Cooper Group navigates the dynamic housing market with its leadership in mortgage servicing, origination expertise, and focus on technology, there are challenges to consider before joining this investment opportunity:

    • Vulnerability to Interest Rates: Fluctuations in interest rates directly impact the demand for mortgages and refinancing activity. Rising interest rates can lead to a decrease in Mr. Cooper's origination revenue. Monitoring economic indicators and Federal Reserve policy is crucial.
    • Housing Market Fluctuations: The overall health of the housing market significantly impacts Mr. Cooper's business. Economic downturns can lead to defaults and delinquencies on mortgages, impacting the company's profitability. Staying informed about market trends and potential risks is vital.
    • Regulation and Compliance: The mortgage industry is heavily regulated, and Mr. Cooper must comply with a complex set of rules. Regulatory changes or fines can impact the company's operations and profitability. Careful analysis of the regulatory landscape is key.

    Final thoughts on Mr. Cooper Group

    Mr. Cooper Group's leadership in mortgage servicing, origination expertise, focus on technology, and strong customer focus paint a potentially promising picture for long-term investors seeking exposure to the housing market. However, the vulnerability to interest rates, fluctuations in the housing market, and the ever-present regulatory environment necessitate a cautious approach. Thorough research, analysis of Mr. Cooper's future plans and the broader housing market landscape, and a clear understanding of your risk tolerance are crucial before joining this housing market expedition. Remember, navigating the intricate terrain of mortgage servicing and origination stocks requires both an awareness of economic trends and a discerning eye for innovation in the financial services sector. Choose wisely, and your portfolio might find itself well-positioned alongside the success story of Mr. Cooper Group.

  • StoneX Group (SNEX)

    StoneX Group Inc., though not a name on everyone's lips, is a major player in the world of financial services. Forget the faceless megabanks, StoneX offers a unique blend of digital platforms and high-touch expertise, connecting companies and investors to the global market ecosystem. Imagine them as the bridge builders of finance, providing access and execution services across various asset classes. Their comprehensive offerings cater to a broad clientele, from institutional traders to individual investors, offering valuable tools for navigating the complexities of global markets. Their dedication to innovation and a focus on personalized service positions them as a key facilitator in today's interconnected financial landscape.

    StoneX Group financial statements

    Analysts recommendation: 1

    Financial Health

    • Return on assets (ROA): 0.95%
    • Return on equity (ROE): 15.42%
    • Return on investment (ROI): 8.81%

    Profitability

    • Gross margin: 3.23%
    • Operating margin: 1.67%
    • Net profit margin: 0.27%

    Growth

    • EPS (past 5 years): 31.12%
    • EPS (current): 7.21
    • EPS estimate (next quarter): 1.75
    • EPS growth (this year): 48.79%
    • EPS growth (next year): 0.14%
    • EPS growth (next 5 years): 19%
    • EPS growth (quarter-over-quarter): -13.16%
    • Sales growth (past 5 years): 21.93%
    • Sales growth (quarter-over-quarter): 79.89%

    💡 Why invest in StoneX Group?

    Why Consider StoneX Group Inc. for Your Financial Needs?

    • Global Reach: They provide access to a vast network of exchanges and markets, allowing you to trade a wide range of assets, from commodities to currencies to securities.
    • Digital Platforms & High-Touch Service: StoneX combines user-friendly digital tools with the expertise of seasoned professionals, catering to both independent and hands-on investors.
    • Clearing and Execution Services: They handle the behind-the-scenes processes of your trades, ensuring smooth and efficient transactions.
    • Diverse Client Focus: Whether you're a seasoned trader or a new investor, StoneX offers solutions tailored to your experience level and risk tolerance.

    🐌 Key considerations before investing in StoneX Group

    Investment Considerations Before Choosing StoneX Group Inc.

    • Complexity of Markets: The global financial landscape can be intricate, and navigating it requires a certain level of knowledge or risk tolerance. StoneX may not be suitable for all investors, particularly those unfamiliar with complex financial instruments.
    • Commissions and Fees: Trading through StoneX will involve commissions and fees, so understanding their pricing structure is essential. These fees can eat into your profits, so make sure the potential returns justify the costs.
    • Focus on Institutional Clients: While they cater to individual investors, StoneX also has a strong focus on institutional clients. This could impact the level of personalized service available to you and the priority given to your trades.
    • Regulatory Environment: The global financial services industry is heavily regulated. Any changes in regulations could impact StoneX's operations and potentially affect your investments.

    Final thoughts on StoneX Group

    StoneX's focus on global reach, their blend of digital tools and human expertise, and the ever-growing importance of financial interconnectedness paint a promising picture for those seeking access and guidance in navigating the global markets. However, the inherent complexity of financial markets, associated fees, a potential focus on institutional clients, and the ever-changing regulatory landscape necessitate careful consideration. Thorough research on StoneX's offerings, their fee structure, and a clear understanding of your risk tolerance and investment goals are crucial before choosing them as your financial partner. Remember, sometimes the most significant opportunities in the financial world lie in building the right connections. StoneX could be the bridge that connects you to your global investment goals, but be sure to carefully weigh the potential drawbacks before investing.

  • CBIZ (CBZ)

    In the complex symphony of financial services, where transactions hum and tax codes orchestrate financial health, CBIZ reigns supreme. This professional services maestro isn't just crafting accounting reports and filing tax returns; it's conducting a multifaceted performance, harmonizing financial and benefits expertise to empower businesses of all sizes. But can this financial conductor translate its business acumen into rewarding returns for your portfolio? Let's explore the hidden currents propelling CBIZ's rise, alongside the potential off-key notes to consider before joining this financial expedition.

    CBIZ financial statements

    Analysts recommendation: 1

    Financial Health

    • Return on assets (ROA): 5.66%
    • Return on equity (ROE): 13.69%
    • Return on investment (ROI): 8.19%

    Profitability

    • Gross margin: 13.83%
    • Operating margin: 9.71%
    • Net profit margin: 7.08%

    Growth

    • EPS (past 5 years): 17.03%
    • EPS (current): 2.36
    • EPS estimate (next quarter): -0.33
    • EPS growth (this year): -6.69%
    • EPS growth (next year): 35.43%
    • EPS growth (next 5 years): 11.25%
    • EPS growth (quarter-over-quarter): 4.1%
    • Sales growth (past 5 years): 11.92%
    • Sales growth (quarter-over-quarter): 6.9%

    💡 Why invest in CBIZ?

    CBIZ' robust profile makes it a tempting pick for investors seeking exposure to the ever-evolving financial and benefits services sectors. Here's what fuels its multi-faceted financial symphony:

    • Financial Maestro: CBIZ boasts a nationwide network of over 120 offices, serving businesses with accounting, tax, and advisory services. This leadership in financial navigation translates to consistent contracts and predictable revenue streams, providing a strong foundation for future growth.
    • Beyond the Transaction: Recognizing the diverse needs of modern businesses, CBIZ expands its offerings, developing expertise in benefits and insurance solutions, property & casualty brokerage, and valuation services. This strategic diversification mitigates risk and unlocks diverse avenues for growth beyond traditional accounting and tax services.
    • Human Harmony: CBIZ thrives on its commitment to personalized service, employing industry-leading professionals and leveraging technology to deliver tailored solutions. This client-centric approach fosters long-term relationships and drives repeat business.
    • National Reach, Global Growth: With operations spanning the United States and select international markets, CBIZ caters to diverse financial needs worldwide. This global reach provides access to emerging markets with burgeoning demand for business services, further bolstering its future prospects.

    🐌 Key considerations before investing in CBIZ

    While CBIZ navigates the financial labyrinth with its diverse offerings and client focus, there are some potential off-key notes to consider before joining this high-stakes journey:

    • Valuation Concerns: Like many established financial services companies, CBZ's stock can be volatile, and the current price might reflect expectations of future economic conditions, regulatory changes, and overall market trends. A cautious approach with a patient, long-term perspective is wise.
    • Economic Jitters: Global economic downturns can impact business spending on professional services, potentially hitting CBIZ's order book and profitability. Close monitoring of economic trends and their impact on the service sector is crucial.
    • Competition Intensifies: Larger established players and nimble digital accounting firms are vying for market share, challenging CBIZ's dominant position. Stay informed about industry trends and how CBIZ plans to maintain its competitive edge.
    • Regulatory Rondo: Evolving regulations surrounding tax codes, accounting standards, and insurance policies can impact CBIZ's operations and necessitate costly compliance measures. Monitoring regulatory developments and CBIZ's adaptation strategies is important.

    Final thoughts on CBIZ

    CBIZ's diverse offerings, client-centric approach, national reach, and global potential paint a potentially promising picture for long-term investors seeking exposure to the dynamic financial and benefits services sectors. However, the volatile nature of the stock, economic sensitivity, rising competition, and evolving regulatory landscape warrant a measured approach. Thorough research, analysis of CBIZ's future plans and the financial services landscape, and a clear understanding of your risk tolerance are crucial before joining this financial expedition. Remember, navigating the intricate terrain of financial services stocks requires both a discerning eye for innovative solutions and a balanced perspective on potential challenges. Choose wisely, and your portfolio might just find itself harmonizing with the success story of CBIZ.

If you are interested in other stock categories, check out my other lists of the best mid-cap utility, basic materials, energy, industrial, retail, healthcare, financial, tech, semiconductor stocks.