Financials

The Financial Sector contains companies involved in activities such as banking, mortgage finance, consumer finance, specialized finance, investment banking and brokerage, asset management and custody, corporate lending, insurance, financial investment, real estate investment trusts (REITs), as well as companies engaged in real estate management & development.

Last % Change Market Cap Market Weight Weighting Recommendations
S&P Capital IQ Ned Davis Research (PDF)
+0.08% $6.92T 16.43% Marketweight
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Sector Commentary from Standard & Poor's

S&P Capital IQ recommends marketweighting the S&P 500 Financials sector. Year to date through April 3, 2014, the S&P 500 Financials Index, which represented 16.4% of the S&P 500 Index, was up 2.6% in price, compared with a 2.2% gain for the S&P 500. In 2013, this sector index rose 33.2%, versus a price advance of 29.6% for the 500. There are 21 sub-industry indices in this sector. Diversified Banks is the largest, representing 31.9% of the sector's market value, while Real Estate Services is the smallest, accounting for 0.3% of the sector.
The cap-weighted average of this sector's component company S&P Capital IQ STARS (Stock Appreciation Ranking System) is 3.6, as compared with a cap-weighted average of 3.5 for the S&P 500. The sub-industries within this sector that currently show the highest average STARS are Office REITs at 5.0, MultiSector Holdings at 4.9, and Retail REITs at 4.7. Those with the lowest average STARS are Hotel & Resort REITs at 3.0, Real Estate Services at 3.0, and Investment Banking & Brokerage at 2.8. According to Capital IQ, the sector is projected to record a 4.7% year-over-year increase in operating earnings per share in 2014, as compared with the S&P 500's estimated EPS growth of 7.5%. During 2013, this sector posted a 13.4% advance in EPS, versus an increase of 5.9% for the S&P 500. The sector's price-to-earnings ratio of 14.1X, based on consensus 2014 operating EPS estimates, is well below the S&P 500's forward P/E of 16.0X. Capital IQ also reports that the consensus long-term EPS growth estimate for this sector is 10.4% versus the S&P 500's 12.0%, giving the sector a P/E-to-projected EPS growth rate (PEG) ratio of 1.4X, which is above the broader market's PEG of 1.3X. Finally, this sector pays a dividend yield of 1.8%, as compared with the yield of 2.0% for the S&P 500.
S&P Capital IQ's proprietary technical indicator for this sector currently shows a positive reading. In researching the past market history of prices and trading volume for each company, S&P Capital IQ's computer models apply special technical methods and formulas to identify and project price trends for the sector.

Marketweight

Understanding Weighting Recommendations

Sector weighting recommendations are provided by independent, third-party research firms to help further refine your analysis.

Some sectors get "over," "market," or "under" weighted, which means that the research firm recommends that more, the same, or less of the sector should be held in your portfolio than is held in the market.

Learn more about the average recommendation holding period and methodology of the research firms:

View weighting recommendations for all sectors

Performance

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Past performance is no guarantee of future results.