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Tech Stocks Outshine Financials in 2015, Heading into 2016

Strategic Insights

— 2 min read

Tech investors have smiled all the way to the bank in 2015, but if you're one of those who primarily bet on financial stocks, your mood could understandably be a little somber. We examined how each sector performed in 2015 and which is best positioned for growth in the new year. Many of the stocks we highlight below have been reliable sources of income and they should continue to reward income investors in 2016 and beyond.

Key Takeaways:

  • The Technology Sector, led by Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Alphabet (GOOG), saw significant gains in 2015, with AAPL gaining 7.8%, MSFT gaining 20%, and GOOG gaining 46%.
  • Accenture PLC Class A (ACN) logged over 22% gains this year, with a growing order book easing worries of meager fourth quarter sales growth.
  • Cisco Systems (CSCO) has seen a flattish 2015 with stock price dipping by 1.2%, but still offers a nearly 3% dividend yield, one of the best incomes in the large tech space.
  • IBM (IBM) posted a roughly 12% loss this year, with its enterprise software, IT services, and hardware businesses being formidable but an estimated 9.7% EPS drop this year.
  • Western Digital Corp.'s (WDC) transformation as a major storage company with a recent $19-billion acquisition hasn't found many takers, with earnings sliding and the stock falling by 41% year to date.
  • In the Financial Sector, Wells Fargo (WFC) has gained 1.55% this year, with one of the lowest cost structures in the banking industry and a return on common equity at about 14%.
  • Payment processor VISA (V) saw its shares jump nearly 23% in 2015, with the massive deal to acquire VISA Europe being the key trigger for future benefits.
  • Bank of New York Mellon Corp. (BK) saw its shares rise by 8.6% this year, with nearly 80% of revenues coming from fee-based activities and a return on equity at about 14%.
  • American Express Co. (AXP) saw a nearly a 24% slide in its stock price this year, with a series of setbacks, a fall in earnings, and no rebound forecast for next year.
  • Morgan Stanley's (MS) renaissance as a financial holding company regulated by the Fed has meant that the stock fell about 9% this year, with weak third-quarter results and growth in trading and fixed-income businesses being concerns.

Statistics:

  • Apple Inc. (AAPL) gained 7.8% in 2015.
  • Microsoft Corp. (MSFT) gained 20% in 2015.
  • Alphabet (GOOG) gained 46% in 2015.
  • Accenture PLC Class A (ACN) gained 22% in 2015.
  • Cisco Systems (CSCO) gained 1.2% in 2015.
  • IBM (IBM) lost 12% in 2015.
  • Western Digital Corp. (WDC) lost 41% in 2015.
  • Wells Fargo (WFC) gained 1.55% in 2015.
  • VISA (V) gained 23% in 2015.
  • Bank of New York Mellon Corp. (BK) gained 8.6% in 2015.
  • American Express Co. (AXP) lost 24% in 2015.
  • Morgan Stanley (MS) lost 9% in 2015.

Sources:

  • http://us.spindices.com/indices/equity/sp-500-information-technology-sector
  • http://us.spindices.com/indices/equity/sp-500-financials-sector
  • http://www.morningstar.com/stocks/xnas/aapl/quote.html
  • http://www.morningstar.com/stocks/xnas/msft/quote.html
  • http://www.morningstar.com/stocks/xnas/goog/quote.html
  • http://www.morningstar.com/stocks/xnys/acn/quote.html
  • http://www.morningstar.com/stocks/xnas/cSCO/quote.html
  • http://www.morningstar.com/stocks/xnys/IBM/quote.html
  • http://www.morningstar.com/stocks/xnas/wdc/quote.html
  • http://www.morningstar.com/stocks/xnys/wfc/quote.html
  • http://www.morningstar.com/stocks/xnys/v/quote.html
  • http://www.morningstar.com/stocks/xnys/bk/quote.html
  • http://www.morningstar.com/stocks/xnys/BRK.A/quote.html
  • http://www.morningstar.com/stocks/xnys/axp/quote.html
  • http://www.morningstar.com/stocks/xnys/ms/quote.html

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