In this article, we take a look at 10 best stocks to buy for investment. If you want to see more best stocks to buy for investment, go directly to 5 Best Stocks to Buy for Investment.
While different people have different opinions on what the best stocks for investment are, a decent number of investors think the stocks of leading companies with substantial competitive advantages whose shares are generally less volatile could be good candidates.
Less volatile stocks generally don’t move as much as the broader stock market does because the future financial performance of less volatile stocks is arguably more predictable. There are certain times where less volatile stocks can be more volatile, however, such as during earnings.
Less volatile stocks include leading consumer staples whose demand doesn’t change all that much in more challenging economic times. Some less volatile stocks are conglomerates or have multiple leading brands. As a result of having multiple different businesses or multiple different brands, the overall company’s results might not change as much as the results of an individual business or individual brand do.
Many of the same leading stocks with generally lower betas also have fair growth prospects due to various reasons. For some companies, they might have decent growth potential in faster growing emerging markets such as India. For other companies, they might be repurchasing a lot of their stock. If a company buys back substantial shares and doesn’t issue any new shares, its EPS could grow even if its overall earnings stay the same.
Although they might have fairly predictable businesses, individual stocks might still underperform if a company makes a bad acquisition, for instance, or if its overall market demand isn’t as strong as expected. As a result, it could be a good idea for long term investors to have a well diversified portfolio of leading stocks across many different sectors.
In terms of 2023, many of the leading lower beta stocks have not rallied as much as the market has year to date. In some instances, the lower volatility stocks have declined year to date as individual company earnings have not be as strong as expected. Nevertheless, analysts do expect the leading consumer staples conglomerates mentioned in this article to grow in the long term.
New York Stock Exchange
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Methodology
For our list of 10 Best Stocks to Buy for Investment, we picked 10 stocks that have lower betas than the overall market and that have decent growth potential according to their EPS next 5 Year Ratio.
We ranked each of the 10 stocks based on their market capitalization as of 2/15.
Consumer staple The Clorox Company (NYSE:CLX) has a fairly high EPS growth forecast over the next 5 years of 13.38% because its trailing TTM EPS is relatively low. As a result of trailing twelve month EPS of $3.51, The Clorox Company (NYSE:CLX) has a P/E of 43.79 which is pretty high. Given analysts expect faster earnings over the next 5 years, The Clorox Company (NYSE:CLX) could eventually grow into its valuation and still be an attractive investment in the next 10 years. Shares are up 9.55% year to date and 7.54% in the last year.
Alongside The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT), and Johnson & Johnson (NYSE:JNJ), The Clorox Company (NYSE:CLX) is a low beta stock with decent EPS growth potential.
Church & Dwight Co., Inc. (NYSE:CHD) is a consumer staple that owns well known brands such as Arm & Hammer. For full year 2022, the company’s net sales rose 3.6% year over year and its organic sales increased 1.4% year over year. Adjusted EPS was $2.97, a decline of 1.7% compared to 2021 adjusted EPS. Church & Dwight Co., Inc. (NYSE:CHD) shares are down 14.46% in the last year given the weaker results due in part to higher inflation. While Church & Dwight Co., Inc. (NYSE:CHD)’s earnings didn’t increase in 2022, analysts expect the company to earn $3.07 per share in 2023, $3.33 per share in 2024, and $3.60 per share in 2025.
Kimberly-Clark Corporation (NYSE:KMB) is a leading personal care corporation that makes paper based consumer products. In terms of its portfolio, Kimberly-Clark Corporation (NYSE:KMB) has five billion dollar brands that are sold in over 175 countries. In terms of its 2021, developing and emerging markets accounted for 30% of its net sales.
When it comes to organic sales growth, the company has averaged around 3% growth from 2019 to 2021. For 2022, Kimberly-Clark Corporation (NYSE:KMB)’s full year adjusted EPS declined 9% year over year to $5.63. In terms of outlook, the company expects net sales in 2023 to increase 0 to 2 percent including organic sales growth of 2 to 4 percent.
Colgate-Palmolive Company (NYSE:CL) is a leading consumer products company that makes toothpaste, mouthwashes, and more. In terms of the next 5 years, analysts expect Colgate-Palmolive Company (NYSE:CL) to grow its annual EPS on average by 6.02%. Specifically, analysts expect the company’s EPS to increase from $2.97 in 2022 to $3.11 in 2023, $3.40 in 2024, and $3.70 in 2025. Colgate-Palmolive Company (NYSE:CL) shares have a dividend yield of 2.59% as of 2/15.
Unilever PLC (NYSE:UL) is a leading household and personal products company whose underlying sales rose 9% in 2022. For the year, the company’s underlying earnings per share decreased 2.1% year over year, however, to €2.57. During 2022, the company bought back €1.5 billion worth of shares and also paid €4.3 billion in dividends. For 2022, Unilever PLC (NYSE:UL) added, “Unilever delivered a year of strong topline growth in challenging macroeconomic conditions. Underlying sales growth was 9.0%, driven by disciplined pricing action in response to high input cost inflation. Growth was broadbased across each of our five Business Groups, led by strong performances from our billion+ Euro brands. Despite sharp rises in material costs, we have prioritised stepping up our brand and marketing investment. Underlying operating margin was delivered in line with our guidance, with underlying operating profit up for the year.”
Unilever PLC (NYSE:UL) shares are up 2.44% year to date and have a dividend yield of 3.49% as of February 15.
Like Unilever PLC (NYSE:UL), The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT), and Johnson & Johnson (NYSE:JNJ) are low beta stocks with decent EPS growth potential.
McDonald’s Corporation (NYSE:MCD) is a leading fast food restaurant chain whose stock has rallied 5.2% in the last year and 1.15% year to date. In 2022, the company’s global comparable sales rose 10.9% year over year, with U.S. comparable sales rising 5.9% year over year and the company’s international operated markets segment comparable sales rising 13.3% year over year. McDonald’s Corporation (NYSE:MCD)’s systemwide sales rose 5% year over year. McDonald’s Corporation (NYSE:MCD) free cash flow was $5.488 billion for 2022, down from $7.102 billion in 2021.
PepsiCo, Inc. (NASDAQ:PEP) is a beverage and snack giant whose shares have more than doubled from early 2013 thanks to the company’s strong brands and decent organic growth. In the last year, PepsiCo, Inc. (NASDAQ:PEP) stock has risen 5.58% despite inflation headwinds as the market anticipates EPS growth in the future.
The Procter & Gamble Company (NYSE:PG) is a consumer staple conglomerate whose stock has declined 8.31% year to date given various headwinds. For the second quarter of its fiscal year, The Procter & Gamble Company (NYSE:PG) had core EPS of $1.59 per share on sales of $20.8 billion, versus the consensus of $1.59 per share on revenue of $20.73 billion. Q2 gross margin declined 160 basis points versus one year ago.
The Procter & Gamble Company (NYSE:PG) CEO Jon Moeller said, “We delivered solid results in the second quarter of fiscal year 2023 in what continues to be a very difficult cost and operating environment. Progress against our plan fiscal year to date enables us to raise our sales growth outlook for fiscal 2023 and maintain our guidance range for EPS growth despite significant headwinds. We remain committed to our integrated strategies of a focused product portfolio, superiority, productivity, constructive disruption and an agile and accountable organization structure. These strategies have enabled us to build and sustain strong momentum. They remain the right strategies to navigate through the near-term challenges we’re facing and continue to deliver balanced growth and value creation.”
With a market capitalization of $327.83 billion, The Procter & Gamble Company (NYSE:PG) ranks #3 on our list of 10 Best Stocks to Buy for Investment.
Walmart Inc. (NYSE:WMT) is a retail giant that analysts expect will increase its EPS by an average of 4.34% annually over the next 5 years. One potential reason for the expected EPS growth is that the company’s board announced a new up to $20 billion share buyback authorization in November 2022. In recent quarters, Walmart Inc. (NYSE:WMT) has also benefited from more consumers shopping at its stores given the higher inflation. As of February 15, Walmart Inc. (NYSE:WMT) has a forward P/E ratio of 22.55 and a dividend yield of 1.53%.
Healthcare giant Johnson & Johnson (NYSE:JNJ) ranks #1 on our list of 10 Best Stocks to Buy for Investment given its market capitalization of $416.67 billion as of 2/15. Analysts expect Johnson & Johnson (NYSE:JNJ) to grow its EPS by an average of 3.89% a year in the next 5 years with consensus estimates of $10.51 per share in 2023, $10.89 per share in 2024, and $11.28 per share in 2025. As of 2/15, Johnson & Johnson (NYSE:JNJ) has a forward P/E of 14.59 and a dividend yield of 2.84%.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
