Financials Sector Report
Market Cap: $19.4T
Stocks: 919
Median P/E: 10.6x
Median ROIC: 8.4%
Data sourced from SEC EDGAR filings. Report refreshed weekly.
The Financials sector includes commercial and investment banks, insurance companies, asset managers, and specialty finance firms. Capital allocation, credit risk management, and interest rate sensitivity are defining characteristics. The sector serves as a conduit for capital formation across the broader economy, with profitability closely tied to yield curve dynamics and credit cycle positioning.
Performance Dashboard
| Period | Sector (MCW) | Sector (Median) |
|---|---|---|
| 1 Day | +0.1% | -0.2% |
| 1 Week | -2.0% | -1.1% |
| 1 Month | — | — |
| 3 Months | — | — |
| 6 Months | — | — |
| YTD | -0.2% | -0.1% |
| 1 Year | +29.9% | +11.3% |
| 3 Years | +118.2% | +39.8% |
| 5 Years | +700.2% | +30.6% |
Today's Breadth: 317 advancing · 449 declining · 52 flat
Valuation Summary
| Metric | Median | P25 | P75 | vs 5Y Avg |
|---|---|---|---|---|
| P/E | 10.6x | 1.4x | 15.8x | -2% |
| P/B | 1.0x | 0.2x | 1.6x | +2% |
| P/S | 1.7x | 0.1x | 3.2x | — |
| P/FCF | 7.9x | 0.8x | 13.2x | — |
| EV/EBITDA | 9.9x | 6.5x | 20.3x | — |
| EV/EBIT | 11.1x | 7.3x | 22.5x | — |
Earnings Yield
8.0%
FCF Yield
7.9%
Below Fair Value
27% of stocks
Profitability Profile
Margins
| Metric | Median | 5Y Avg | P25 | P75 |
|---|---|---|---|---|
| Gross Margin | 64.7% | 71.3% | 40.9% | 75.3% |
| Operating Margin | 14.2% | — | 2.0% | 30.3% |
| Net Margin | 17.3% | 19.5% | 7.8% | 25.9% |
| FCF Margin | 21.2% | — | 10.3% | 33.5% |
Returns on Capital
| Metric | Median | 5Y Avg | P25 | P75 |
|---|---|---|---|---|
| ROE | 10.4% | — | 6.3% | 15.1% |
| ROA | 1.0% | — | 0.4% | 2.0% |
| ROIC | 8.4% | 8.8% | 3.9% | 14.3% |
Growth Metrics
| Metric | 1Y | 3Y CAGR | 5Y CAGR |
|---|---|---|---|
| Revenue | +5.9% | +10.3% | +9.2% |
| EPS | +16.7% | +2.1% | +9.6% |
| Free Cash Flow | +12.6% | +1.4% | +7.2% |
All values represent sector median growth rates.
Balance Sheet Health
Debt / Equity
0.4x
Net Debt / EBITDA
-0.9x
Interest Coverage
1.4x
Current Ratio
1.7x
Altman Z-Score
Safe (>3): 15 (9%)
Gray (1.8–3): 8 (5%)
Distress (<1.8): 141 (86%)
Piotroski F-Score
Strong (7–9): 106 (12%)
Moderate (4–6): 577 (63%)
Weak (0–3): 233 (25%)
Top Companies
| Symbol | #▲ | Mkt Cap | P/E | EV/EBITDA | ROIC | Net Mgn | Rev Gr. | Div Yld | YTD | Qual. |
|---|---|---|---|---|---|---|---|---|---|---|
| HSBC | 1 | $1.8T | — | — | 26.5% | — | — | — | -1.5% | 3/9 |
| BACRP | 2 | $1.4T | 50.7x | 410.6x | 4.8% | 15.2% | -2.5% | 0.6% | 0.0% | 4/9 |
| BRK-B | 3 | $1.1T | 0.0x | 11.7x | 9.8% | 18.0% | 0.0% | — | +0.1% | 5/9 |
| JPM | 4 | $872.4B | 16.3x | 12.8x | 7.2% | 30.5% | +2.8% | 1.8% | +1.4% | 5/9 |
| GLDI | 5 | $750.5B | — | — | 64.0% | -20.3% | +30.7% | — | -0.8% | 3/9 |
| BAC | 6 | $406.8B | 14.7x | 142.3x | 4.8% | 15.2% | -2.5% | 1.9% | +0.3% | 4/9 |
| SWED-A-ST | 7 | $371.3B | 6.8x | — | — | 46.3% | +0.5% | 7.2% | — | 3/9 |
| DGP | 8 | $358.0B | — | — | 25.2% | -0.0% | -0.2% | — | — | 2/9 |
| HBCYF | 9 | $345.0B | — | — | 26.5% | — | — | — | -3.3% | 3/9 |
| MS | 10 | $288.3B | 17.8x | 124.7x | 3.9% | 23.0% | +14.4% | 2.1% | +2.2% | 4/9 |
| UNH | 11 | $285.2B | 25.1x | 15.4x | 7.0% | 2.7% | +11.8% | 2.6% | +3.8% | 3/9 |
| GS | 12 | $282.9B | 17.6x | 15.8x | 4.2% | 28.0% | +8.9% | 1.6% | +2.5% | 5/9 |
| WFC | 13 | $280.7B | 15.1x | 41.2x | 5.7% | 16.4% | -1.5% | 1.8% | +1.3% | 4/9 |
| BWVTF | 14 | $269.4B | — | — | 28.4% | 19.9% | -9.2% | — | 0.0% | 2/9 |
| C | 15 | $258.4B | 17.1x | 23.4x | 2.8% | 8.5% | -1.2% | 2.2% | +2.1% | 4/9 |
| HSBA-L | 16 | $254.7B | 9.7x | — | — | — | — | 6.0% | — | 4/9 |
| AXP | 17 | $228.1B | 24.7x | 17.8x | 12.8% | 26.2% | +6.4% | 0.9% | -0.5% | 6/9 |
| MUFG | 18 | $206.2B | 18.2x | 97.7x | 3.2% | 22.4% | +4.5% | 2.3% | -5.8% | 3/9 |
| SAN | 19 | $179.5B | 9.8x | — | — | 15.2% | -2.2% | 2.2% | -14.8% | 5/9 |
| SCHW | 20 | $175.2B | 21.8x | 9.8x | 11.8% | 35.2% | +22.0% | 1.1% | +3.0% | 5/9 |
Industry Composition
| Industry | Stocks | Market Cap | % | |
|---|---|---|---|---|
| National Commercial Banks | 118 | $4.8T | 24.9% | |
| Commercial Banks, Nec | 28 | $2.3T | 11.8% | |
| Savings Institution, Federally Chartered | 39 | $2.1T | 11.0% | |
| Security Brokers, Dealers & Flotation Companies | 28 | $1.9T | 9.9% | |
| Fire, Marine & Casualty Insurance | 66 | $1.8T | 9.5% | |
| State Commercial Banks | 201 | $1.1T | 5.8% | |
| Banks - Regional | 11 | $765.2B | 4.0% | |
| Investment Advice | 58 | $657.8B | 3.4% | |
| Finance Services | 64 | $624.3B | 3.2% | |
| Federal & Federally-Sponsored Credit Agencies | 41 | $504.4B | 2.6% | |
| Hospital & Medical Service Plans | 10 | $490.9B | 2.5% | |
| Banks - Diversified | 5 | $387.1B | 2.0% | |
| Security & Commodity Brokers, Dealers, Exchanges & Services | 11 | $351.6B | 1.8% | |
| Life Insurance | 25 | $276.1B | 1.4% | |
| Insurance - Diversified | 5 | $248.5B | 1.3% |
Showing top 15 of 46 industries.
Quality Distribution
0
1
2
3
4
5
6
7
8
9
Quality Score (0-9)
High Quality (7+)
1%
Median Piotroski F
5/9
Profitable Years
9 of 10
Dividends & Shareholder Returns
Paying Dividends
60%
Median Div Yield
2.8%
Median Buyback Yield
0.8%
Shareholder Yield
3.2%
Payout Ratio
34.1%
Div Growth (3Y)
5.6%
Div Growth (5Y)
6.5%
Strengths & Weaknesses
Strengths
- +[Profitability]High pricing power with a median gross margin of 64.7%, reflecting differentiated products or strong brand moats.
Weaknesses
- −[Financial Health]86.0% of companies fall in the Altman Z-Score distress zone (<1.8), indicating elevated bankruptcy risk within the sector.
- −[Leverage]Tight interest coverage at 1.4x, leaving limited cushion for debt servicing if earnings decline.
- −[Quality]Only 1.2% of companies score 7+ on the quality checklist, reflecting structural challenges in achieving consistent returns across the sector.
- −[Valuation]Only 27.2% of companies trade below estimated fair value, suggesting limited margin of safety at current prices.