THE BEST FINANCIAL-SERVICES STOCKS TO BUY (According to Morningstar – Nov 2025)
Morningstar looked at a wide range of financial-services companies and picked 12 undervalued stocks that are considered attractive buys right now.
Why These Stocks Were Selected
Morningstar screened for companies that:
✅ Are undervalued compared to their fair value
✅ Have economic moats (meaning they can defend their business for long periods)
• Narrow moat: can stay competitive for ≥10 years
• Wide moat: can stay competitive for ≥20 years
• No moat: less competitive strength
✅ Have Low–Very High uncertainty ratings, meaning analysts show how unpredictable their future earnings could be
THE 12 BEST FINANCIAL-SERVICES STOCKS TO BUY NOW
(From most undervalued upward)
1. Western Union (WU)
2. PayPal (PYPL)
3. MarketAxess (MKTX)
4. TransUnion (TRU)
5. FactSet (FDS)
6. LPL Financial (LPLA)
7. BNP Paribas (BNPQY)
8. Blue Owl Capital (OWL)
9. Blackstone (BX)
10. Cohen & Steers (CNS)
11. Ares Management (ARES)
12. Ally Financial (ALLY)
DETAILED BREAKDOWN OF EACH STOCK
1️⃣ Western Union (WU)
Price vs Fair Value: 0.50 (50% undervalued)
Sector: Credit Services
Moat: Narrow
Dividend Yield: 11.12%
SUMMARY:
• Trading at half its fair value—the cheapest on the list.
• Struggled previously due to fintech competition.
• Management is now stabilizing the business by lowering prices and rebuilding digital channels.
• Digital transfers grew sharply during the pandemic but dipped later.
• Political headwinds (e.g., US policies reducing immigration) are reducing money transfer volumes.
✨ Investment Angle:
Good for dividend lovers, but growth prospects remain limited.
2️⃣ PayPal (PYPL)
Price vs Fair Value: 0.64
Moat: Narrow
⚠️ Uncertainty: High
Dividend Yield: 0.93%
SUMMARY:
• Trading at a 36% discount.
• Strong position in online payments but facing competition from Apple Pay and new fintech players.
• Management is cutting costs and trying to make growth more profitable.
• Venmo has long-term upside but not a major contributor yet.
✨ Investment Angle:
Strong brand, still relevant, undervalued — but competition is fierce.
3️⃣ MarketAxess (MKTX)
Price vs Fair Value: 0.64
Moat: Wide
Dividend Yield: 1.82%
Sector: Capital Markets
SUMMARY:
• Runs the world’s leading platform for electronic corporate bond trading.
• Benefiting from the global shift from manual to digital bond trading.
• Facing competition from Tradeweb and Trumid.
• 2025 is a testing year to see if it can regain market share.
✨ Investment Angle:
Strong moat and long-term demand for electronic bond trading → a high-quality undervalued stock.
4️⃣ TransUnion (TRU)
Price vs Fair Value: 0.68
Moat: Wide
Dividend Yield: 0.56%
SUMMARY:
• One of the Big Three credit bureaus.
• Expanding into insurance, rentals, and collections to diversify revenue.
• Strong position in India—huge long-term opportunity.
• Acquisitions have been strategic, though they used expensive variable-rate debt in 2021.
✨ Investment Angle:
Wide moat + long-term growth, especially internationally.
5️⃣ FactSet (FDS)
Price vs Fair Value: 0.69
Moat: Narrow
Dividend Yield: 1.65%
SUMMARY:
• Provides financial data and analytics (similar to Bloomberg).
• Biggest clients: asset managers & investment bankers.
• Wealth management and CUSIP business are the fastest-growing.
• Could even become an acquisition target in the future.
✨ Investment Angle:
Strong recurring revenue. Good long-term play in the financial data space.
6️⃣ LPL Financial (LPLA)
Price vs Fair Value: 0.71
Moat: Wide
Dividend Yield: 0.34%
SUMMARY:
• Largest independent broker-dealer in the US.
• Growing financial advisor headcount aggressively.
• Strong retention rate (over 97%).
• Few large acquisition opportunities left in the market.
✨ Investment Angle:
Scale advantage + recurring advisor growth = solid long-term value.
7️⃣ BNP Paribas (BNPQY)
Price vs Fair Value: 0.74
Moat: None
Dividend Yield: 3.92%
SUMMARY:
• France’s biggest bank.
• Very stable earnings despite tough European banking conditions.
• Strong in investment banking compared to European peers.
• French retail banking is not very profitable due to many mutual banks.
✨ Investment Angle:
Stable performer with room to benefit from rising European interest rates.
8️⃣ Blue Owl Capital (OWL)
Price vs Fair Value: 0.77
Moat: Narrow
Dividend Yield: 6.53%
SUMMARY:
• One of the world’s biggest alternative asset managers.
• Strong fundraising in 2025 ($40B expected).
• Earnings expected to grow through 2027.
✨ Investment Angle:
High dividend + strong asset management growth = very attractive income stock.
9️⃣ Blackstone (BX)
Price vs Fair Value: 0.79
Moat: Wide
Dividend Yield: 3.38%
SUMMARY:
• The world’s largest alternative asset manager.
• Highly diversified: private equity, real estate, credit, infrastructure.
• Fundraising is consistently strong even in tough markets.
✨ Investment Angle:
A global powerhouse — top choice for long-term investors seeking exposure to alternative assets.
Cohen & Steers (CNS)
Price vs Fair Value: 0.79
Moat: Narrow
Dividend Yield: 4.16%
Focus: Real Estate securities
SUMMARY:
• AUM has dropped from 2021 peaks due to rising interest rates.
• Despite outflows, their investment performance is very strong.
• Competition rising from private real estate funds (e.g., Blackstone REIT).
✨ Investment Angle:
Attractive if you believe real estate will rebound.
1️⃣1️⃣ Ares Management (ARES)
Price vs Fair Value: 0.81
Moat: Narrow
Dividend Yield: 3.09%
SUMMARY:
• One of the world’s top alternative asset managers.
• Strong brand, strong fundraising, strong product range.
• Managing nearly $600B in assets.
✨ Investment Angle:
High-quality asset manager with stable long-term growth.
OVERALL TAKEAWAY
This list contains a mix of:
• High-dividend income stocks (WU, OWL, CNS, BX)
• Wide-moat durable businesses (MKTX, LPLA, TRU, BX)
• Tech-driven financial companies (PYPL, MKTX, FDS)
• Global bank exposure (BNP Paribas)
These stocks are undervalued right now and have strong long-term competitive positions.
Morningstar looked at a wide range of financial-services companies and picked 12 undervalued stocks that are considered attractive buys right now.
Why These Stocks Were Selected
Morningstar screened for companies that:
✅ Are undervalued compared to their fair value
✅ Have economic moats (meaning they can defend their business for long periods)
• Narrow moat: can stay competitive for ≥10 years
• Wide moat: can stay competitive for ≥20 years
• No moat: less competitive strength
✅ Have Low–Very High uncertainty ratings, meaning analysts show how unpredictable their future earnings could be
THE 12 BEST FINANCIAL-SERVICES STOCKS TO BUY NOW
(From most undervalued upward)
1. Western Union (WU)
2. PayPal (PYPL)
3. MarketAxess (MKTX)
4. TransUnion (TRU)
5. FactSet (FDS)
6. LPL Financial (LPLA)
7. BNP Paribas (BNPQY)
8. Blue Owl Capital (OWL)
9. Blackstone (BX)
10. Cohen & Steers (CNS)
11. Ares Management (ARES)
12. Ally Financial (ALLY)
DETAILED BREAKDOWN OF EACH STOCK
1️⃣ Western Union (WU)
Price vs Fair Value: 0.50 (50% undervalued)
Sector: Credit Services
Moat: Narrow
Dividend Yield: 11.12%
SUMMARY:
• Trading at half its fair value—the cheapest on the list.
• Struggled previously due to fintech competition.
• Management is now stabilizing the business by lowering prices and rebuilding digital channels.
• Digital transfers grew sharply during the pandemic but dipped later.
• Political headwinds (e.g., US policies reducing immigration) are reducing money transfer volumes.
✨ Investment Angle:
Good for dividend lovers, but growth prospects remain limited.
2️⃣ PayPal (PYPL)
Price vs Fair Value: 0.64
Moat: Narrow
⚠️ Uncertainty: High
Dividend Yield: 0.93%
SUMMARY:
• Trading at a 36% discount.
• Strong position in online payments but facing competition from Apple Pay and new fintech players.
• Management is cutting costs and trying to make growth more profitable.
• Venmo has long-term upside but not a major contributor yet.
✨ Investment Angle:
Strong brand, still relevant, undervalued — but competition is fierce.
3️⃣ MarketAxess (MKTX)
Price vs Fair Value: 0.64
Moat: Wide
Dividend Yield: 1.82%
Sector: Capital Markets
SUMMARY:
• Runs the world’s leading platform for electronic corporate bond trading.
• Benefiting from the global shift from manual to digital bond trading.
• Facing competition from Tradeweb and Trumid.
• 2025 is a testing year to see if it can regain market share.
✨ Investment Angle:
Strong moat and long-term demand for electronic bond trading → a high-quality undervalued stock.
4️⃣ TransUnion (TRU)
Price vs Fair Value: 0.68
Moat: Wide
Dividend Yield: 0.56%
SUMMARY:
• One of the Big Three credit bureaus.
• Expanding into insurance, rentals, and collections to diversify revenue.
• Strong position in India—huge long-term opportunity.
• Acquisitions have been strategic, though they used expensive variable-rate debt in 2021.
✨ Investment Angle:
Wide moat + long-term growth, especially internationally.
5️⃣ FactSet (FDS)
Price vs Fair Value: 0.69
Moat: Narrow
Dividend Yield: 1.65%
SUMMARY:
• Provides financial data and analytics (similar to Bloomberg).
• Biggest clients: asset managers & investment bankers.
• Wealth management and CUSIP business are the fastest-growing.
• Could even become an acquisition target in the future.
✨ Investment Angle:
Strong recurring revenue. Good long-term play in the financial data space.
6️⃣ LPL Financial (LPLA)
Price vs Fair Value: 0.71
Moat: Wide
Dividend Yield: 0.34%
SUMMARY:
• Largest independent broker-dealer in the US.
• Growing financial advisor headcount aggressively.
• Strong retention rate (over 97%).
• Few large acquisition opportunities left in the market.
✨ Investment Angle:
Scale advantage + recurring advisor growth = solid long-term value.
7️⃣ BNP Paribas (BNPQY)
Price vs Fair Value: 0.74
Moat: None
Dividend Yield: 3.92%
SUMMARY:
• France’s biggest bank.
• Very stable earnings despite tough European banking conditions.
• Strong in investment banking compared to European peers.
• French retail banking is not very profitable due to many mutual banks.
✨ Investment Angle:
Stable performer with room to benefit from rising European interest rates.
8️⃣ Blue Owl Capital (OWL)
Price vs Fair Value: 0.77
Moat: Narrow
Dividend Yield: 6.53%
SUMMARY:
• One of the world’s biggest alternative asset managers.
• Strong fundraising in 2025 ($40B expected).
• Earnings expected to grow through 2027.
✨ Investment Angle:
High dividend + strong asset management growth = very attractive income stock.
9️⃣ Blackstone (BX)
Price vs Fair Value: 0.79
Moat: Wide
Dividend Yield: 3.38%
SUMMARY:
• The world’s largest alternative asset manager.
• Highly diversified: private equity, real estate, credit, infrastructure.
• Fundraising is consistently strong even in tough markets.
✨ Investment Angle:
A global powerhouse — top choice for long-term investors seeking exposure to alternative assets.
Cohen & Steers (CNS)
Price vs Fair Value: 0.79
Moat: Narrow
Dividend Yield: 4.16%
Focus: Real Estate securities
SUMMARY:
• AUM has dropped from 2021 peaks due to rising interest rates.
• Despite outflows, their investment performance is very strong.
• Competition rising from private real estate funds (e.g., Blackstone REIT).
✨ Investment Angle:
Attractive if you believe real estate will rebound.
1️⃣1️⃣ Ares Management (ARES)
Price vs Fair Value: 0.81
Moat: Narrow
Dividend Yield: 3.09%
SUMMARY:
• One of the world’s top alternative asset managers.
• Strong brand, strong fundraising, strong product range.
• Managing nearly $600B in assets.
✨ Investment Angle:
High-quality asset manager with stable long-term growth.
OVERALL TAKEAWAY
This list contains a mix of:
• High-dividend income stocks (WU, OWL, CNS, BX)
• Wide-moat durable businesses (MKTX, LPLA, TRU, BX)
• Tech-driven financial companies (PYPL, MKTX, FDS)
• Global bank exposure (BNP Paribas)
These stocks are undervalued right now and have strong long-term competitive positions.