The financial sector has been somewhat of a disappointment so far in 2018, but this could mean that it's a good time to look for great long-term investments. In this Industry Focus: Financials clip, host Shannon Jones and Fool.com contributor Matt Frankel, CFP, discuss why they think Goldman Sachs (NYSE:GS) and Square (NYSE:SQ) could be worth a look now.

A full transcript follows the video.

This video was recorded on Sept. 10, 2018.

Shannon Jones: We've gone through three of the top performers. I'm curious to know, though, from your perspective, what is your top financials sector pick right now? If you had to pick one stock, would it be any of these three? Or would it be one that's maybe not included in this list?

Matt Frankel: Out of the three, I would say SVB. But overall in the financials sector, I really have my eye on Goldman Sachs right now. I love that they're just now starting to get into the consumer space. The Marcus lending platform, a lot of you have probably seen ads for their loans. They're about to get into the credit card business with a partnership with Apple. I don't know of any better way to get into the credit card business than that.

And they're doing this, which a lot of people aren't getting, without having a legacy branch network like a Bank of America or JPMorgan Chase or any of those do. So it has an inherent cost advantage, excellent brand power, and tremendous potential to grow their consumer business. They want to do mortgages, life insurance, all kinds of financial products on top of what they're already doing.

I just think that the market's really underestimating the potential of Goldman's consumer banking. It's still trading at one of the cheapest valuations of the big banks. So, that's the one I have my eye on right now.

Jones: That's a good one, Matt, Goldman Sachs. I think for me, I've said it here many times before, I really can't get off of this stock and how well it has done and continues to do -- for me, it comes back to Square, ticker SQ. Many just view Square as a payments company. The thing I love about this company is that it's so much more than that, and really has the potential to become so much more than that. The bank will become a bank at some point. Square Capital right now is a payments company, it's really investing in technology. I think this is where it's really going to pay off for the stock in the long-term and get it beyond just being a payments company.

It's building a massive ecosystem, not just for consumers, but also for merchants. What you're seeing is, as they are branching out with Square Capital on the lending side for merchants, opens up a huge door on the consumer lending side. I think that'll be a tremendous growth runway for them. Also, too, internationally, the U.S. market is pretty well-saturated with many of these payment tech companies. But internationally, I think, is really where you see the growth potential get enormous. That's why you see competitors like PayPal and Venmo also beginning to dive into that space, as well.

All in all, I feel like Square is a company that is growing and has tremendous growth opportunity on the other side, as well.

Frankel: Yeah, definitely. I will say that, out of the five stocks we talked about on this podcast today, Square's the only one that I own personally. So, I'm definitely with you on that recommendation.

Jones: Well, you heard it here first, listeners: Square, top pick from both of us here today.

Matthew Frankel, CFP owns shares of Apple, Bank of America, and Square and has the following options: short December 2018 $90 calls on Square. Shannon Jones owns shares of Apple. The Motley Fool owns shares of and recommends Apple, PayPal Holdings, and Square. The Motley Fool has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, and short September 2018 $80 calls on Square. The Motley Fool has a disclosure policy.