Despite there being concerns surrounding the valuations of many finance stocks at the start of the year, there are examples of strong performers within the sector.
Indeed, AMP Limited (ASX: AMP), Macquarie Group Ltd (ASX: MQG) and Australia and New Zealand Banking Group (ASX: ANZ) have all outperformed the ASX during the course of 2014.
Of course, while their share prices may not be quite as attractive as they were ten months ago, they could still offer Foolish investors strong returns moving forward. Here's how.
AMP
With shares in AMP being up 28% year-to-date, their performance has easily surpassed that of the ASX, which is up just 2% in 2014. As a result, AMP now trades on a premium to the wider market, with it having a P/E ratio of 17.3 versus 15.6 for the ASX.
However, it could be argued that the wealth management company deserves an even bigger premium to the wider market, since its earnings growth forecasts are excellent. For example, in the current financial year, AMP is expected to increase earnings by 55%, with next year due to see growth of 12%.
Both of these numbers are significantly ahead of the wider index and mean that at current prices, AMP could be trading on a P/E ratio of just 14.5 next year. And, with a partially franked yield of 4.3%, AMP could prove to be a great income, growth and value play, thereby continuing its outperformance of the ASX in 2015.
Macquarie
The share price performance of Macquarie has surprised a large number of investors, with gains of 8% being recorded in 2014. Certainly, the valuation discount versus the ASX that was present has largely closed up, but Macquarie still looks attractive on a relative basis.
For example, it continues to offer solid growth prospects, with earnings forecast to rise by 7.8% in each of the next two years. Furthermore, with a partially franked yield of 4.6%, Macquarie is still a prudent means of beating both inflation and low interest rates.
Such impressive numbers should keep investor interest in the stock buoyant and could mean that sentiment remains strong, thereby allowing Macquarie to continue its impressive relative performance in 2015 and beyond.
Australia and New Zealand Banking Group
Although it has only outperformed the ASX by around 30 basis points in 2014, ANZ could deliver much better share price performance in 2015. Certainly, it continues to offer diversified exposure to the finance sector, both operationally and geographically and may represent good value right now.
For example, ANZ has a P/E ratio of just 13, and when combined with impressive earnings growth numbers, its PEG ratio stands at only 1.17. This indicates that there could be strong share price performance ahead for ANZ, and with a fully franked yield of 5.2%, its total return could make a positive contribution to your portfolio moving forward.
