The Best Financial Stocks to Buy With $1,000 Right Now

The private credit sector has experienced a wave of bankruptcies over the past year. That’s causing concerns that more defaults could be forthcoming. As a result, investors are pulling capital from private credit funds.

The issues facing the private credit market have weighed on shares of leading alternative investment managers Brookfield Corporation (BN +1.17%) and Blackstone (BX +0.95%). While the sector’s issues could affect these industry giants, they have an exceptional track record of investing in the space. That makes the sell-offs in these financial stocks look like great buying opportunities for those with $1,000 to invest right now.

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A leader in private credit and much more

Shares of Brookfield Corporation are currently down more than 20% from their 52-week high amid concerns about the private credit sector. The elite global investment manager has built out a leading credit platform over the past decade. A key aspect of its strategy has been to partner with several top credit managers. For example, in 2019, Brookfield bought a majority stake in Oaktree, “whose credit business is second to none,” stated Brookfield CEO Bruce Flatt at the time of the deal. Brookfield would go on to acquire the remaining stake in Oaktree last year. Oaktree is an exceptionally well-run credit platform that has helped drive meaningful growth for Brookfield’s credit business over the past several years.

While private credit is important to Brookfield’s growth, it’s not the only catalyst. Brookfield is also becoming a leading investor in AI infrastructure, which it sees as a generational investment opportunity. Additionally, it has built a wealth solutions business over the past few years, which is also a key growth contributor. These and other growth engines underpin Brookfield’s expectation of growing its distributable earnings per share at a more than 25% compound annual rate over the next five years. Meanwhile, the slump in its stock has pushed its price down below $40 a share, well below the $68 per share value Brookfield estimates it’s worth.

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NYSE: BN

Brookfield Corporation

Today’s Change

(1.17%) $0.46

Current Price

$39.68

Key Data Points

Market Cap

$96B

Day’s Range

$39.23 - $40.27

52wk Range

$29.07 - $49.56

Volume

70K

Avg Vol

5.7M

Gross Margin

26.37%

Dividend Yield

0.64%

An elite credit investor

Shares of Blackstone are down roughly 45% from their 52-week high. That’s due in part to issues facing its flagship private credit fund (BCRED), which reported its first monthly loss in over three years in February after writing down the value of some loans. The fund has also seen a surge in withdrawals this year, driven by investor concerns about private credit.

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NYSE: BX

Blackstone

Today’s Change

(0.95%) $1.03

Current Price

$109.01

Key Data Points

Market Cap

$132B

Day’s Range

$107.45 - $111.61

52wk Range

$101.73 - $190.09

Volume

55K

Avg Vol

8M

Gross Margin

99.27%

Dividend Yield

3.87%

However, BCRED has delivered strong returns for investors (9.5% annualized since its inception, well above leveraged loans). Meanwhile, Blackstone has an exceptional record as a credit investor. Since it started investing in credit 20 years ago, Blackstone’s non-investment-grade private credit strategies have generated 10% net returns annually. That’s more than double the return of the leveraged loan market with minimal losses. Its current portfolio is in excellent shape, with its holdings delivering high-single-digit earnings growth over the past year.

These top-notch financial stocks are on sale

Brookfield Corporation and Blackstone are two of the world’s best alternative investment managers. They have exceptional track records of delivering robust returns for fund investors and shareholders, which should continue. With their share prices down sharply, they’re two of the best financial stocks to invest $1,000 into right now.