It’s been hard to watch the movement in the stock market lately. these are the profitable best stocks to buy now.
It’s been hard to watch the movement in the stock market lately. The Federal Reserve, or Fed, is moving to combat inflation at levels not seen in more than four decades, and most financial experts agree that there is a high probability of a recession in the near term.
Of course, the market reacts. The S&P 500 is down more than 21% year-to-date, with the Dow Jones Industrial Average and Nasdaq Composite down more than 16% and 30%, respectively.
In times like these, it’s hard to decide which stocks to buy, if any. However, even when picking stocks like you’re swimming in a red sea, there are fertile green opportunities to take advantage of.
Best stocks to buy now
When bears dominate the market, your investment decisions are easy to guess, and hard to find anything you’d like to pile your money into. However, no matter how red the market is, there is always a glimmer of green.
Where are those flashes now? these are the best stocks to buy now
The biggest stocks to buy now are big companies with a massive economic moat — a competitive advantage that prevents competitors from getting rid of them. Many of these non-cyclical plays offer solid earnings. And there are a few cyclical gems that risk-taking investors may want to dive into for a discount on gains that look guaranteed in the future.
Here are some ideas for the best stocks to consider buying right now. There is a little something for every type of investor.
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List Of The Best Stocks To Buy Now
1. Exxon Mobil Corp. (NYSE: XOM)
Best for anti-inflation.
Performance: Exxon Mobil stock is up 33% year-to-date and nearly 38% over the past year.
Dividend yield: ~4%.
Rating Scales: P/E Ratio: ~13; P/B ratio: ~2; P/S ratio: ~1.2.
Market value: $357 billion.ExxonMobil is one of the biggest names in oil and gas, which makes it a great anti-inflation stock. Economists often use the price of gasoline as a prima facie measure of inflation. When gas prices start to rise, the domino effect begins. Shipping costs increase, resulting in higher prices for the final consumer.
This is why Exxon Mobil is one of the best stocks you can buy to fight inflation.
The company is the largest gas station chain in the United States and with rising prices, Exxon becomes a direct beneficiary of ever-increasing revenue and profits. Sure, the stock isn’t that impressive when gas prices are down, but for now, it’s a great game.
Exxon is not just a gas station chain. The company has its fingers in all walks of the production process, from drilling crude oil to refineries to selling the finished product directly to consumers.
With gas prices soaring above $4 per gallon, the company is adding a lot of free cash flow to its balance sheet.
At the same time, XOM’s stock price is more than fair. The company’s P/E ratio is well below the average S&P 500 and the P/E ratio is close to 1. Add a return of about 4%, and we’ve got a winner, my friends.
2. UGI Corp (NYSE: UGI)
Best for risk-averse investors.
Performance: UGI is down 15% year-to-date and nearly 16% over the past year.
Dividend Yield: ~3.75%
Rating Scales: P/E Ratio: ~15; P/B Ratio: ~1.4; P/S ratio: ~0.9.
Market value: ~ $8 billion.Many investors’ attitudes to risk have changed since the bear market began. If you become more risk-averse and want to play a fixed interest with big profits to fill the void in your portfolio, then UGI is the best stocks to buy now.
The company is a regulated distributor of natural gas and propane with a history spanning over a century. It has been paying dividends to investors for 138 years and has increased dividend payments for the past 35 years in a row.
This means that even in 2001 when the dotcom bubble burst, in 2008 and 2009 when the Great Recession prevailed, and in 2020 when the COVID-19 virus reared its ugly head, UGI investors enjoyed dividend increases.
Sure, the stock price has seen a painful drop over the past year, but its dips still represent a meaningful win over the S&P 500’s.
Moreover, metrics for the company’s growth suggest that the recent declines will be short-lived. In the most recent quarter, UGI generated 34%+ revenue growth, 90%+ net income growth, 85%+ diluted earnings growth, and 42%+ net profit growth.
When you invest in UGI, you are investing in a company that has more than a century under its belt – a company that hasn’t missed the opportunity to pay dividends to investors in all that time and has a history of outperforming the S&P 500 in a bear. markets.
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3. Duke Energy Corp (NYSE: DUK)
Best to protect your wallet from stagnation.
Performance: DUK stock has grown 2.75% since the start of the year and nearly 6.5% over the past year.
Dividend yield: ~3.7%.
Rating Scales: P/E Ratio: ~20; P/B ratio: ~2; P/S ratio: ~3.
Market value: ~81.9 billion dollars.Duke Energy is one of the largest providers of electrical utilities in the United States. The company serves more than 7.7 million energy customers and more than 1.6 million natural gas customers across six states.
There are three compelling reasons to consider investing in DUK in a bear market:
consumer habits. When the economy is hurt, consumers spend less, but they always pay utility bills. This makes DUK a great investment in the recession.
Date. The company has historically outperformed the S&P index in the face of multiple economic hardships.
stability to growth. The company has seen some impressive growth in recent years but management's primary focus is on business stability, making it a low-volatility game.Truth be told, there is not much to be said about Duke Energy. It’s not an exciting business, it doesn’t have a lot of growth prospects, and it’s not likely to make you rich anytime soon. But what it doesn’t do serves only to define what it does.
Duke Energy continues its mission to provide its customers with quality services at affordable prices. As it stands, it gives its investors consistent returns, consistently paid dividends, and an easier time sleeping at night regardless of the state of the economy or the broader market.
4. Amazon.com, Inc. (NASDAQ: AMZN)
Best for the risk-taking investor.
Performance: Amazon.com's stock price is down more than 33% year-to-date and more than 38% over the past year.
Dividend Yield: 0%
Valuation metrics: P/E ratio (P/E ratio): ~53; price to book ratio (price to book ratio): ~8; Price-to-sales ratio (price-sales ratio): ~ 2.3.
Market capitalization: ~$1.152 trillion.Tech stocks like Amazon.com are probably the last pick you’d expect to find on this list. The company operates in a very cyclical industry and has shed about a third of its value this year alone. There is no doubt that some AMZN investors are frustrated beyond words at this point, but this is often the best time to buy.
Even though the recent sell-off, the stock has maintained its preferred position among exchange-traded funds (ETFs) and mutual funds. What’s so exciting about this falling knife?
Amazon.com is an e-commerce giant with a clear resilience to weather economic storms. The company’s stock price hasn’t fallen even in the face of the COVID-19 pandemic, likely because it has benefited greatly from stay-at-home orders and store closings.
This is not the first crisis the company has faced. Although it has seen its ups and downs, the company’s strong fundamentals carried it through the bursting of the internet bubble and the Great Recession. And while the stock may be down at the moment, this trend is unlikely to last forever.
If history is any indication, the company will be sailing towards all-time highs again in no time.
The company also has the potential to bounce back to greatness while allaying fears. Throughout its existence, Amazon.com has focused on tiny margins in the e-commerce space. However, Amazon Web Services (AWS)’s latest cloud computing offering is only a marginal offer. Margins on the AWS business are so large that they push average company margins over the top.
Finally, Amazon.com faces some economic headwinds going forward, but that’s something the company hasn’t already proven quite capable of handling. If you are tolerant of risk enough to hold what might be a rough short-term correction and wise enough to the average dollar cost in a bear market, AMZN is a stock that deserves your attention.
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5. Devon Energy Corp (NYSE: DVN)
Best for income investors.
Performance: DVN is up over 12% since the beginning of the year and 84% over the past year.
Dividend yield: ~9%.
Rating Scales: P/E Ratio: ~11; P/B ratio: ~4; P/S ratio: ~2.75.
Market value: $33.9 billion.Devon Energy is an income investor’s dream. The company is the highest-earning stock in the S&P 500. Devon Energy is an oil and gas company with a long history of stellar performance – and after growing more than 80% over the past year, the share price is expected to continue to grow.
Income investing veterans might think, “DVN pays dividends only because oil and gas prices are going up.” But that is not the issue. The company has consistently paid solid dividends to investors over the past 29 years, even when oil and gas prices have plummeted.
It has a strong balance sheet and an impressive credit rating. Even when the oil and gas industry isn’t too hot, the company has access to the cash it needs to pay dividends.
Now might be the best time to buy, too.
The Organization of the Petroleum Exporting Countries (OPEC), the world’s largest oil cartel, recently announced plans to increase oil production. The announcement sent DVN down, giving up many of the gains it had already seen this year. Although the stock is up 12% year-to-date, it has given up more than 33% of its value in the past month.
These declines will not last forever.
European countries are expected to ban more than two-thirds of Russian oil imports over the next year, which could push oil prices higher again. This is great news for DVN and its investors.
However, if you are an income investor, you are probably not too interested in price hikes; You are more interested in checking quarterly earnings. When you invest in Devon Energy, you can rest assured that meaningful dividend payments will come on schedule, just as they have for nearly 30 years.
6. Meta Platforms Inc (NASDAQ: META)
Best for growth investors.
Performance: Meta stock is down more than 50% year-to-date and more than 52% over the past year.
Dividend yield: 0%.
Rating Scales: P/E Ratio: ~12; P/B ratio: ~3.5; P/S ratio: ~2.75.
Market value: ~$453 billion.Meta Platforms, formerly known as Facebook, is a Wall Street favorite; It is the fourth most popular stock in ETF portfolios. However, the past year has been a rough time. Although this may cause most investors to run for the hills, it is actually an opportunity.
Meta is a growth stock by almost any definition. The company has had solid revenue growth for years, and earnings per share (EPS) growth has been impressive until the latest earnings report. Furthermore, the stock was known for its massive price hikes until the rug was pulled from the tech sector as inflation fears surfaced earlier this year.
The dips have created an opportunity you don’t see often – a growth stock that can make value investors drool. The Meta is trading with a P/E ratio of around 12, while the S&P 500’s P/E is over 19. The stock’s P/E ratio is also at a five-year low.
Sure, there are some short-term headwinds to consider, including:
Low spending on e-commerce. With prices rising and recession fears mounting, e-commerce and consumer spending are likely to decline, which could affect the company's advertising revenue.
Move to the Metaverse. Meta recently changed its name from Facebook in an effort to rebrand the company as the center of all things metaverse. This transition may come with some growing pains in the near future.
Economic headwind. Many experts warn of a possible recession that could affect the company's revenue and profitability in the short term.Even with these headwinds, Meta presents a unique opportunity to take advantage of stocks that have historically outperformed the market in a significant way but to do so at a significant discount to the current market value.
7. H&R Block Inc (NYSE: HRB)
Best for value investors.
Performance: HRB is up 50% year-to-date and over 54% over the past year.
Dividend yield: ~3%.
Rating Scales: P/E Ratio: ~5; P/B Ratio: ~123; P/S ratio: ~1.4.
Market value: $5.8 billion.H&R Block is a household name, offering do-it-yourself tax services as well as full-service tax professionals. It is also one of the most attractive stocks in the market.
First, let’s address the elephant in the room – a 123 P/B ratio. Sure, that’s high by all accounts. However, it is not significant for HRB. The company has few tangible assets because it is in the service sector.
To get a true picture of the discount the stock is trading, just look at the P/E and P/S ratios, which are around 5 and 1.4 respectively. This is low for any sector. The P/E ratio is about a quarter of that of the Standard & Poor’s 500 Index.
Besides a seriously undervalued valuation, HRB stock has great appeal in current economic times.
All people eat, sleep and pay taxes. Increased interest rates and diminished consumer spending may have a negative effect on other businesses, but people still have to file their taxes no matter what the state of the economy is. HRB’s business model is good even if the recession begins.
As other companies look for ways to cut costs heading into a recession, HRB is revamping the small business product to increase profitability.
If that’s not enough for you, the company offers a thick layer of icing on the cake with a respectable 3% dividend yield.
8. ASML Holding NV (NASDAQ: ASML)
Best for banking over the shortage of microchips.
Performance: ASML shares are down 45% since the start of the year and nearly 37% in the past year.
Dividend yield: ~1.4%.
Rating Scales: P/E Ratio: ~41; P/B Ratio: ~18.5; P/S ratio: ~9.
Market value: ~184.28 billion dollars.There has been a great deal of interest in semiconductor manufacturers such as NVIDIA (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) recently. The widespread shortage of semiconductors has a profound impact on nearly every industry from automobiles to computers and even healthcare.
However, companies like NVIDIA and AMD can’t survive without companies like ASML Holdings, a semiconductor equipment manufacturer that makes tools for the aforementioned brands and many others.
ASML Holdings has a monopoly on the extreme ultraviolet (EUV) lithography machines needed to make the small patterns you find on microchips. They are not only aesthetically pleasing. The smaller and more complex these patterns are, the more data the chip can process.
These machines are not cheap either. ASML generates an estimated $150 million in revenue each time it sells one, and revenue is expected to rise. Even with a potential recession looming, analysts expect significant earnings growth over the rest of 2022 and 2023.
The bottom line is simple. ASML holds a global monopoly on a tool used to create an in-demand product in a global supply shortage. Its tools are used to create the microchips auto manufacturers, medical device manufacturers, and tech companies can’t seem to get enough of. Not to mention, recent declines in the stock have brought the share price to a more than reasonable valuation.
Final word
The aforementioned stocks are some of the best to get behind as the market continues to decline. Looking at the state of the market, each of them is large volume stock, and most of them follow a more conservative investment strategy.
Although these are my favorite choices for investors looking for different options, you have a unique risk tolerance and investment goals. Never blindly invest in the stock picks you to read about online, not even the ones listed above. Do your own research and make informed investment decisions based on what you have learned and how it relates to your unique situation.
Disclosure: The author currently has no positions in any stock mentioned here but can buy shares in Devon Energy (DVN), H&R Block (HRB), ASML Holdings (ASML), UGI Corp (UGI), and Duke Energy (DUK) within the next 72 hours. The opinions expressed are those of the author of the article and not necessarily those of other members of the Money Crashers team or Money Crashers as a whole. This article was written by Joshua Rodriguez, who shared his honest opinion on the mentioned companies. However, this article should not be viewed as a solicitation to buy shares of any security and should only be used for entertainment and information purposes. Investors should consult a financial advisor or perform their own due diligence before making any investment decision.
