Financial stocks have a reputation for being dull, but that's not always the case. Some prominent financial stocks absolutely crushed the market this year. Let's take a look back at how these stocks achieved their stellar returns.

Company Name

% Price Change*



China Life Insurance (NYSE:LFC)


InterContinental Exchange (NYSE:ICE)


Dollar Financial (NASDAQ:DLLR)


First Marblehead (NYSE:FMD)


International Securities Exchange (NYSE:ISE)


Cash America International (NYSE:CSH)


*From Jan. 3, 2006-Dec. 4, 2006. Data provided by Capital IQ.

The pawns become queens
Is it a coincidence that three of our top performers dabble in pawnshops and payday loans? Hardly. The business of high-interest, short-term loans is very profitable.

Although payday lending is under attack from regulators in some states, the industry continues to thrive. EZCORP and Cash America have extensive pawnshop operations to supplement their payday lending, and Dollar Financial has been expanding its presence in Canada and the U.K. Meanwhile, the pure-play payday lenders like Advance America are having a tougher time in this regulatory environment.

Exuberant exchanges
It's been a wild year for the exchange stocks. NYSE Group and Nasdaq received the most press from their quests to conquer Europe, but the InterContintental Exchange and International Securities Exchange provided the truly jaw-dropping returns.

Will the exchanges continue their run? Our team of Foolish analysts feels that the exchange stocks may have gotten ahead of themselves.

China gets insured
Fool analyst Will Frankenhoff has been singing the praises of China Life since July. He argued that China's largest life insurer was a play on China's growth, and appeared to be reasonably valued. At first I was skeptical -- Chinese life insurance? I wish I had listened to him; this year, shares of China Life have nearly tripled.

Marble madness
2005 was a tough year for student loan servicer First Marblehead. First the chairman resigns in a gift-giving scandal. Then there were problems with Bank of America and JPMorgan Chase, two of its biggest customers. Next there were concerns about eroding margins.

Fortunately, the other shoe never dropped, and 2006 was a much better year. Those who saw the value of First Marblehead's expertise in the growing student loan market -- including Hidden Gems analyst Bill Mann -- were rewarded handsomely. First Marblehead is up 131% since Bill recommended shares to Hidden Gems subscribers in March.

And now, my final thoughts
The financial sector is known for stable dividend payers, but it also occasionally offers deep value and high-growth stocks. Investors on the lookout for huge returns should not ignore this sector for the more glamorous tech and Internet stocks.

What will 2007 bring? Motley Fool CAPS, our community intelligence system, has awarded high ratings to First Marblehead, Advance America, JPMorgan Chase, Goldman Sachs, and Capital One. Keep an eye on these stocks as we head into the new year.

NYSE Group is a Rule Breakers pick, Advance America is an Inside Value recommendation, and Bank of America and JPMorgan Chase are Income Investor selections. Check out our entire suite of newsletters by clicking here.

Financial services editor Joey Khattab does not own any of the shares mentioned. The Fool has a disclosure policy .