Stock markets have been through a bumpy time but you wouldnt think it from looking at the shares of top FTSE 100 financials.
Companies selling investments, pensions and insurance policies have outperformed the wider market, often quite spectacularly.Legal & General Group and Prudentialhave returned 145% and 125% respectively over the past five years. Even fund managerAberdeen Asset Management, hardhit by its exposure to emerging markets, is up 129% over that time.
The following three FTSE 100financial stocks are frequently overlooked by investors but also have plentyto shout about.
Fixed Interest
Asset managerSchroders (LSE: SDR) hasnevergrabbedthe attention of private investors. This is a company that broker Numis called dull and boring, although that wasintended as praise. Its share price isnt that dull and boring, having doubled in five years. It is even up 20% over the last troubled 12 months. Black Monday has left its scars andI was hoping for a more temptingvaluation than17.55 times earnings. At 2.70%, the yield isnt so tempting but thats the price of success.
Schroders first-half profits werea pleasant surprise. The bond bubble didnt burst and demand for its fixed-income products remained firm. Pre-tax profits rose 17% year-on-year to 305.7m, beating estimates of 300m. Net inflows were surprisingly strong in Asia-Pacific and Continental Europe, two troubled regions of the world.
Itsfigures look good, with operating margins at 26%, ROCE at 29% and forecast earnings per share (EPS) growth of 7% this year and 8% next. A recent 21% hike in the dividend offers some hope on that front. Schroderscould be a great risk-on stock when investors get their appetite back.
Old Friend
Old Mutual (LSE: OML) has been solid rather than spectacular, its shares up 45% over five years. Again, Black Monday has hurt. The Anglo-South African company may also misschief operating officer Paul Hanratty, who stepsdown after 30years. At 11 times earnings and yielding 4.4%, however, todays entry price looks attractive.
Recent half-year figures show a 20% rise in the adjusted operating profits to 904m. The dividend rose 8% to 2.65p. Old Mutuals core market is South Africa, which means it has to contend with local challenges such as power shortages and the wider emerging market slowdown. EPS are forecast to rise a solid 5% this year and 9% in 2016, liftingthe yield to a respectable 5.5%. Covered 2.1 times, it looks safer than many on the FTSE 100. With the share dropping 15% in the last three months, now could be a good time to buy.
The Place To Be
Wealth managerSt Jamess Place (LSE: STJ) has been one of the best performing financials of all over the past five years, up a whopping 223%. You can guess the effect this has had on the stocks valuation, now a pricey 25 times earnings, and the yield a poorly 2.63%.
Yet thisstock has only recently come on to many investors radars, and many will regret failing to spot it earlier. Its half-year report shows a healthy 16% rise in gross inflow of funds under management to4.4billion, and a similar rise in total funds under management to55.5billion. Ithas also proved effective at retaining existing client funds (Aberdeen, please take note).
With hefty forecast EPS growth of 32% next year, and a 3.8% yield by the end of 2016, St Jamess Placeholds out the promise of more growth to come.
Top performing stocks like these show why investors can’t afford to ignore the stock market.
This FREE Motley Fool report10 Steps To Making A Million In The Marketsets out how investing in stocks and shares over the long-term can make you rich.
You might be surprised to discover howordinary people can become astonishingly wealthy by investing in stocks and shares.
This report shows you how to do it, step-by-step. To find out more,click here now.
Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.