NEW YORK (TheStreet) -- Financial services stocks underperformed the broader market in the first half, and more than a few specialized financial companies had big losses over that period.

The S&P Financials Index fell 1.3% compared to the overall S&P 500 index, which rose 0.2% 

These 10 S&P 500 financial services stocks below had big losses in the first half of the year. That said, not all of the stocks are sells. Sometimes the bargain bin is where the best stock deals are to be had. TheStreet paired each of these tickers with TheStreet Ratings to let you know if you should buy, sell, or hold these worst performing stocks.

Check out which financial stocks were among the worst S&P 500 performers to date. And when you're done check out the best performing S&P 500 financial stocks this year.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Image placeholder title

DFS

data by

YCharts

10. Discover Financial Services (DFS) - Get Report
Sub-Industry: Consumer Finance
Market Cap: $25.5 billion
Rating: Buy, B-
Year-to-date return: -12%

Discover Financial Services operates as a direct banking and payment services company in the United States. It operates in two segments, Direct Banking and Payment Services.

TheStreet said: "We rate DISCOVER FINANCIAL SVCS INC (DFS) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 47.19% is the gross profit margin for DISCOVER FINANCIAL SVCS INC which we consider to be strong. Regardless of DFS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DFS's net profit margin of 23.71% compares favorably to the industry average.
  • DISCOVER FINANCIAL SVCS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, DISCOVER FINANCIAL SVCS INC reported lower earnings of $4.90 versus $4.96 in the prior year. This year, the market expects an improvement in earnings ($5.29 versus $4.90).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Consumer Finance industry average. The net income has decreased by 7.1% when compared to the same quarter one year ago, dropping from $631.00 million to $586.00 million.
Image placeholder title

WY

data by

YCharts

9. Weyerhaeuser Co. (WY) - Get Report
Sub-Industry: Specialized REITs
Market Cap: $16.3 billion
Rating: Buy, B
Year-to-date return: -12.2%

Weyerhaeuser Co. is a real estate investment trust. It primarily invests in United States. The firm operates under four business segments, timberlands, wood products, cellulose fibers and real estate. It owns timberlands primarily in the U.S and has long-term licenses in Canada.

TheStreet said: "We rate WEYERHAEUSER CO (WY) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its respectable return on equity which we feel is likely to continue. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, WEYERHAEUSER CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • WY, with its decline in revenue, slightly underperformed the industry average of 8.5%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • WEYERHAEUSER CO's earnings per share declined by 41.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WEYERHAEUSER CO increased its bottom line by earning $1.38 versus $0.83 in the prior year. For the next year, the market is expecting a contraction of 17.4% in earnings ($1.14 versus $1.38).
  • In its most recent trading session, WY has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 47.9% when compared to the same quarter one year ago, falling from $194.00 million to $101.00 million.
Image placeholder title

HCN

data by

YCharts

8. Health Care REIT Inc. (HCN)
Sub-Industry: Specialized REITs
Market Cap: $23 billion
Rating: Buy, B
Year-to-date return: -13.3%

Health Care REIT, Inc. is an independent equity real estate investment trust. The firm engages in acquiring, planning, developing, managing, repositioning and monetizing of real estate assets. It primarily invests in the real estate markets of the United States. The firm primarily invests in senior living and health care properties.

TheStreet said: "We rate HEALTH CARE REIT INC (HCN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HCN's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • HEALTH CARE REIT INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HEALTH CARE REIT INC increased its bottom line by earning $1.40 versus $0.09 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.40).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 212.1% when compared to the same quarter one year prior, rising from $66.38 million to $207.15 million.
Image placeholder title

VTR

data by

YCharts

7. Ventas Inc. (VTR) - Get Report
Sub-Industry: Specialized REITs
Market Cap: $20.5 billion
Rating: Buy, B
Year-to-date return: -13.4%

Ventas, Inc. is a publicly owned real estate investment trust. The firm engages in investment, management, financing, and leasing of properties in the healthcare industry. It invests in the real estate markets of the United States and Canada.

TheStreet said: "We rate VENTAS INC (VTR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 19.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $344.17 million or 21.00% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.81%.
  • VENTAS INC's earnings per share declined by 7.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, VENTAS INC reported lower earnings of $1.60 versus $1.66 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $1.60).
  • In its most recent trading session, VTR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

Prologis Inc. is an independent equity real estate investment trust. It invests in the real estate markets across the globe. The firm engages in the ownership, development, management, and leasing of industrial distribution and retail properties.

TheStreet said: "We rate PROLOGIS INC (PLD) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, good cash flow from operations, impressive record of earnings per share growth and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 5000.4% when compared to the same quarter one year prior, rising from $6.80 million to $346.88 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $81.53 million or 12.85% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.81%.
  • PROLOGIS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PROLOGIS INC increased its bottom line by earning $1.18 versus $0.42 in the prior year. For the next year, the market is expecting a contraction of 1.5% in earnings ($1.16 versus $1.18).
  • The gross profit margin for PROLOGIS INC is rather low; currently it is at 24.95%. Regardless of PLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PLD's net profit margin of 68.69% significantly outperformed against the industry.
Image placeholder title

NAVI

data by

YCharts

5. Navient Corp. (NAVI) - Get Report
Sub-Industry: Consumer Finance
Market Cap: $7.4 billion
Rating: Buy, B-
Year-to-date return: -15.7%

Navient Corporation provides financial products and services in the United States. The company operates in four segments: FFELP Loans, Private Education Loans, Business Services, and Other.

TheStreet said: "We rate NAVIENT CORP (NAVI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, increase in net income, notable return on equity, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 33.3% when compared to the same quarter one year prior, rising from $219.00 million to $292.00 million.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Consumer Finance industry and the overall market, NAVIENT CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for NAVIENT CORP is currently very high, coming in at 72.08%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.90% is above that of the industry average.
Image placeholder title

AXP

data by

YCharts

4. American Express Co. (AXP) - Get Report
Sub-Industry: Consumer Finance
Market Cap: $19 billion
Rating: Buy, B
Year-to-date return: -16.5%

American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide.

TheStreet said: "We rate AMERICAN EXPRESS CO (AXP) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, growth in earnings per share, attractive valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Consumer Finance industry average. The net income increased by 6.5% when compared to the same quarter one year prior, going from $1,432.00 million to $1,525.00 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.4%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • AMERICAN EXPRESS CO has improved earnings per share by 11.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, AMERICAN EXPRESS CO increased its bottom line by earning $5.55 versus $4.88 in the prior year. For the next year, the market is expecting a contraction of 1.0% in earnings ($5.50 versus $5.55).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Consumer Finance industry and the overall market, AMERICAN EXPRESS CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

HST data by YCharts

Image placeholder title

3. Host Hotels & Resorts Inc. (HST) - Get Report
Sub-Industry: Specialized REITs
Market Cap: $15 billion 
Rating: Buy, B
Year-to-date return: -16.6%

Host Hotels & Resorts, Inc. is a publicly owned real estate investment trust (REIT). The firm primarily engages in the ownership and operation of hotel properties. It invests in the real estate markets of United States.

TheStreet said: "We rate HOST HOTELS & RESORTS INC (HST) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.5%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $173.00 million or 1.16% when compared to the same quarter last year. In addition, HOST HOTELS & RESORTS INC has also modestly surpassed the industry average cash flow growth rate of 0.81%.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, HOST HOTELS & RESORTS INC's return on equity is below that of both the industry average and the S&P 500.
  • HOST HOTELS & RESORTS INC's earnings per share declined by 45.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HOST HOTELS & RESORTS INC increased its bottom line by earning $0.97 versus $0.27 in the prior year. For the next year, the market is expecting a contraction of 33.0% in earnings ($0.65 versus $0.97).
Image placeholder title

HCP

data by

YCharts

2. HCP Inc. (HCP) - Get Report
Sub-Industry: Hybrid REITs
Market Cap: $16.9 billion
Rating: Hold, C
Year-to-date return: -17.2%

HCP, Inc. is an independent hybrid real estate investment trust. The fund invests in real estate markets of the United States. It primarily invests in properties serving the healthcare industry including sectors of healthcare such as senior housing, life science, medical office, hospital and skilled nursing. The fund also invests in mezzanine loans and other debt instruments. It engages in acquisition, development, leasing, selling and managing of healthcare real estate and provides mortgage and other financing to healthcare providers.

TheStreet said: "We rate HCP INC (HCP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HCP's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for HCP INC is rather high; currently it is at 56.55%. Regardless of HCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCP's net profit margin of -38.53% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 192.9% when compared to the same quarter one year ago, falling from $259.11 million to -$240.61 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HCP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
Image placeholder title

IRM

data by

YCharts

1. Iron Mountain Inc. (IRM) - Get Report
Sub-Industry: Specialized REITs
Market Cap: $6.5 billion
Rating: Buy, B-
Year-to-date return: -19.8%

Iron Mountain Incorporated, a real estate investment trust, provides storage and information management services in North America, Europe, Latin America, and the Asia Pacific.

TheStreet said: "We rate IRON MOUNTAIN INC (IRM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, IRON MOUNTAIN INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for IRON MOUNTAIN INC is rather high; currently it is at 57.07%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, IRM's net profit margin of 5.48% significantly trails the industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • IRM, with its decline in revenue, underperformed when compared the industry average of 8.5%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • IRON MOUNTAIN INC's earnings per share declined by 13.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, IRON MOUNTAIN INC increased its bottom line by earning $1.69 versus $0.52 in the prior year. For the next year, the market is expecting a contraction of 27.2% in earnings ($1.23 versus $1.69).


Must REad: