ASX 200 bank stocks have always been popular with Australian investors, mostly because of their historically generous dividends.
But broker Macquarie is forecasting ho-hum dividend yields from the big four banks this year.
Specifically, 2.8% for Commonwealth Bank of Australia (ASX: CBA) shares, 4.6% for National Australia Bank Ltd (ASX: NAB) shares, 4.8% for Westpac Banking Corporation (ASX: WBC) shares, and 5.7% for Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares, based on stock prices at the time of writing.
Macquarie also has uninspiring ratings on these ASX bank stocks — namely a neutral rating on ANZ and NAB shares and an underperform rating on CBA and Westpac shares.
The broker also expects the share prices of all four big bank stocks to fall over the next 12 months.
If you want to heed Macquarie's advice and avoid the bank stocks for now, what should you buy instead?
Investing in the ASX financial sector is still a sound option, given it's the market's second biggest sector and is known for good dividends.
Lots of ASX financial shares also offer appealing potential upside over the next 12 months, according to the broker.
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14 ASX financial shares set to outperform: broker
According to a new note, Macquarie has given an outperform rating to 14 of the ASX financial shares under its coverage.
Some of them are offering more potential share price growth than others.
Here are some examples.
Liberty Group (ASX: LFG)
The broker has a 12-month price target of $4.40 on this ASX financial share.
The Liberty share price finished yesterday's session at $3.12.
The broker's forecast implies a potential 41% upside from here.
QBE Insurance Group Ltd (ASX: QBE)
Macquarie has a share price target of $23 on this insurance giant.
QBE shares closed at $22.37 on Thursday, implying an almost 3% upside on offer to investors from here.
GQG Partners Inc (ASX: GQG)
Macquarie has a share price target of $2.90 on GQG.
The GQG share price at the market close yesterday was $2.24.
The broker's forecast implies a potential 29% upside ahead.
Pinnacle Investment Management Group Ltd (ASX: PNI)
Macquarie has a 12-month target of $27.37 on Pinnacle Investment shares.
Pinnacle Investment shares closed at $19.92 yesterday, suggesting a possible 37% upside from here.
Navigator Global Investments Ltd (ASX: NGI)
The broker has a 12-month target of $2.37 on this ASX financial share.
Navigator shares closed at $1.75 on Thursday, indicating a potential 36% capital gain ahead.
Fleetpartners Group Ltd (ASX: FPR)
Macquarie has a 12-month target of $3.77 on the stock of this car fleet management company.
Fleetpartners shares closed at $2.99 on Thursday, implying 26% potential growth over the next year.
Qualitas Ltd (ASX: QAL)
The broker has a target price of $3.10 on this alternative real estate investment manager.
Qualitas shares closed at $2.74 yesterday, suggesting a potential 13% capital gain ahead.
AMP Ltd (ASX: AMP)
The broker has a 12-month target of $1.34 on this ASX financial share.
The AMP share price closed at $1.31 yesterday.
The broker's forecast implies AMP shares are almost fully valued, with just 2% potential growth ahead.
