Investing in the companies behind powerful secular trends can be a smart decision for investors. That's why I'm looking at the fintech industry.
Besides investing in pure-play financial-tech stocks, investors might consider buying a dominant business that has exposure to this market. Here's a "Magnificent Seven" stock that's a clear fintech powerhouse through this lens.
Image source: Getty Images.
Strong brand and global reach lead to impressive adoption
It is estimated that there are well over 1 billion active Apple (AAPL 1.93%) iPhones around the world. This gives the consumer tech giant a tremendous distribution advantage, as it's in the pockets of so many people. Apple has unrivaled brand strength and a loyal customer base, which paved the way for its financial services efforts.
Apple Pay, a digital wallet, was born in 2014. It's available in 89 markets and is estimated to have hundreds of millions of users across the globe, handling trillions of dollars in annual payment volume.
In 2019, Apple Card was launched. The $20 billion credit card portfolio was just sold by Goldman Sachs to JPMorgan Chase, two prestigious Wall Street banks that showcase just how valuable having access to Apple customers can be. These cardholders also receive Apple's savings account, whichn currently yields 3.65%.
NASDAQ: AAPL
Key Data Points
Shares are expensive
Apple's successful foray into financial services doesn't automatically make the stock a buy. The valuation is expensive, so investors should wait for a sizable pullback before putting money to work.
