Rising corporate and consumer spending and the growing interest in financial products are driving the growth of the financial services industry. The industry is also well-positioned to benefit from the high-interest-rate environment through improvements in profit margins.
However, not all financial services stocks are set to capitalize on the favorable trends. I think popular stock Block, Inc. (SQ) is best avoided now, given its fundamental weakness. One could instead buy Consumer Portfolio Services, Inc. (CPSS), Zuora, Inc. (ZUO), and Medallion Financial Corp. (MFIN) to benefit from the favorable industry trends.
