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Are These Stocks the Best Bets in the Financial Sector?

Investors seeking to bet on financial stocks have set their eyes on today’s Fed meeting. All economic indicators point to a rate hike decision. In fact, Janet Yellen, speaking at the Congress’s Joint Economic Committee in November, said that an increase in interest rates could come “relatively soon.”

Most industries in the finance space, including banking, insurance and brokerage, will benefit from rising rates.

Moreover, the U.S. economy is progressing well as indicated by the improving real GDP numbers, declining unemployment rate, rising consumer spending and stabilizing housing market. These have further boosted investors’ confidence in the Finance stocks as the sector’s performance is largely dependent on the nation’s economic health.

Here, we bring a handful of stocks that are expected to give good returns.

How to Choose Winning Stocks

You can find companies with robust fundamentals and future prospects. Another key factor that one should consider is the comprehensive performance of the industry to which a company belongs.

In fact, studies have divulged that an average stock in a strong industry is likely to perform better than an exceptional stock within an industry that is out of favor with investors. Therefore, the combination of top performing industries and stocks, which are expected to shine, will surely enhance your investment portfolio.

Though finding the top industries is not easy, the Zacks Industry Rank makes this task relatively simple. Along with screening the industries, one needs to be very careful in picking stocks to get meaningful profits.

We zeroed in on stocks with favorable Zack Industry Rank and a Zacks Rank #1 (Strong Buy) or 2 (Buy).

4 Stocks to Buy Now

AeroCentury Corp. ACY, based in Burlingame, CA, is an independent aircraft leasing company. Belonging to the Financial-Leasing Companies industry that carries a Zacks Industry Rank #17 (top 6%), the company acquires aircraft and aircraft engines for lease to regional airlines and commercial users in the U.S. and worldwide.

This Zacks Rank #2 stock gained about 3.7% over the last three months, compared with about 9.2% gain for the Zacks categorized Leasing Companies industry. The stock’s earnings estimates for the current year have been revised significantly upward in the last 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.



McGrath Rentcorp MGRC, headquartered in Livermore, CA, is a business to business rental company. The company belongs to the Financial-Leasing Companies industry, which has a Zacks Industry Rank #17 (top 6%). The company rents and sells relocatable modular buildings, electronic test equipment, and liquid and solid containment tanks and boxes in the U.S. and worldwide.

This Zacks Rank #2 stock gained about 21.3% over the last three months, compared with about 9.2% gain for the Zacks categorized Leasing Companies industry. The stock’s earnings estimates for the current year have been revised 1.9% upward over the last 60 days.



Employers Holdings, Inc. EIG, headquartered in Reno, NV, operates in the Insurance - Accident and Health industry, which has a Zacks Industry Rank #23 (top 9%). The company provides workers' compensation insurance to small businesses in low- to medium-hazard industries.

This Zacks Rank #1 stock gained about 34.6% year to date, compared with about 20.4% gain for the Zacks categorized Accident & Health industry. The stock’s earnings estimates for the current year have been revised 3.0% upward over the last 60 days.



Unum Group UNM, based in Chattanooga, TN, provides group and individual disability insurance products and services primarily in the U.S. and the UK. The company belongs to the Insurance - Accident and Health industry that carries a Zacks Industry Rank #23 (top 9%).

This Zacks Rank #2 stock gained about 30.9% year to date, outperforming the 20.4% gain for the Zacks categorized Accident & Health industry. The stock’s earnings estimates for the current year have been revised 1.0% upward over the last 60 days.



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AEROCENTURY CP (ACY): Free Stock Analysis Report
 
MCGRATH RENTCOR (MGRC): Free Stock Analysis Report
 
UNUM GROUP (UNM): Free Stock Analysis Report
 
EMPLOYERS HLDGS (EIG): Free Stock Analysis Report
 
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