Jim Cramer's 6 Best Stock Picks in the Financial Services Sector

 

NEW YORK (TheStreet) -- Jim Cramer is steering clear of investing in bank stocks, but he does see opportunity in other financial services stocks.

It's one of 12 sectors where investors should put their money. "Maybe it's an aversion to owning the banks, but the bank-relateds look awfully good here, the processors, the ancillary businesses and alike," Cramer wrote in Here Are 12 Sectors to Bet On on the Real Money Web site.

The S&P 500 is up 12% for the year to date. In each of Cramer's 12 sectors, "you can almost throw darts and win with a couple of rare exceptions," he wrote.

We've listed Cramer's picks alongside the TheStreet Ratings, TheStreet's proprietary stock rating tool which projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 30 major data points, TheStreet Ratings uses a quantitative approach to rating stocks. 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.

Cramer's analysis and that of TheStreet Ratings may differ as Cramer may evaluate stocks without regard to time horizon, while TheStreet Ratings uses consensus estimates for the next 12 months only. In addition, changes in TheStreet Ratings may lag Jim Cramer's analysis, as consensus estimates may take some time to change meaningfully.

Check out Cramer's top picks in the financial services sector.

Dun & Bradstreet

Dun & Bradstreet (DNB) is a leading source of commercial data, analytics and insight to businesses. The company's D&B Risk Management Solutions is used to mitigate credit and supplier risk, increase cash flow and drive increased profitability. Its D&B Sales & Marketing Solutions provides data management capabilities for cost efficient marketing solutions. Dun & Bradstreet had revenue totaling $1.7 billion in fiscal 2013.

Market Cap: $4.5 billion

52-week high: $128.03 on Nov. 25

52-week low: $94.29 on Feb. 5

Year-to-date Return: 2.2%

TheStreet Ratings team rates DUN & BRADSTREET CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate DUN & BRADSTREET CORP (DNB) 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, increase in stock price during the past year and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow."

You can view the full analysis from the report here: DNB Ratings Report

Janus Capital Group

Janus Capital Group (JNS) is an investment management firm that offers mutual funds, pooled investment vehicles, separate accounts and subadvised accounts in both domestic and international markets. Notable fixed-income fund manager Bill Gross joined Janus on Sept. 26. Janus managed $174 billion in assets as of Dec. 31, 2013.

Market Cap: $2.9 billion

52-week high: $15.95 on Sept. 26

52-week low: $10.13 on April 10

Year-to-date Return: 26%

TheStreet Ratings team rates JANUS CAPITAL GROUP INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate JANUS CAPITAL GROUP INC (JNS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, good cash flow from operations, solid stock price performance and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

You can view the full analysis from the report here: JNS Ratings Report

Legg Mason

Legg Mason (LM) is a global asset management firm. The company had $702 billion assets under management as of year-end (its fiscal year ended March 31).

Market Cap: $6.4 billion

52-week high: $57.15 on Nov. 28

52-week low: $38.15 on Dec. 5, 2013

Year-to-date Return: 28%

TheStreet Ratings team rates LEGG MASON INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate LEGG MASON INC (LM) 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, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: LM Ratings Report

BlackRock

BlackRock (BLK) offers investment management, risk management and advisory services for institutional and retail clients globally. The company provides a broad range of investment and risk management services. At Dec. 31, 2013, it had $4.3 trillion assets under management.

Market Cap: $60 billion

52-week high: $360.83 on Nov. 28

52-week low: $284.78 on Feb. 3

Year-to-date Return: 13%

TheStreet Ratings team rates BLACKROCK INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate BLACKROCK INC (BLK) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

You can view the full analysis from the report here: BLK Ratings Report

MasterCard

MasterCard (MA) is operates a global payments network that facilitates the process of electronic payments by consumers, businesses and governments instead of using cash and checks. MasterCard had net revenue of $8.4 billion in 2013.

Market Cap: $102 billion

52-week high: $89.24 on Dec. 3, 2014

52-week low: $68.68 on April 11

Year-to-date Return: 5.7%

TheStreet Ratings team rates MASTERCARD INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MASTERCARD INC (MA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

You can view the full analysis from the report here: MA Ratings Report

Visa

Visa (V) is the larger of the two global payments tech companies. It connects consumers, businesses, banks and governments in more than 200 countries to use digital currency. Visa had revenue of 12.7 billion for 2014 (its fiscal year ended on Sept. 30).

Market Cap: $163 billion

52-week high: $261.88 on Dec. 3, 2014

52-week low: $194.84 on April 11

Year-to-date Return: 17.5%

TheStreet Ratings team rates VISA INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate VISA INC (V) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

You can view the full analysis from the report here: V Ratings Report

-Written by Laurie Kulikowski in New York.

Follow @LKulikowski

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