The Best Stocks To Buy Right Now

The Best Stocks To Buy Right Now


The Standard & Poor’s benchmark index is up 10.6% year-to-date through the end of March, and U.S. stocks have been up over each of the past five months.

But if you’re looking for optimism among traders and brokers, you could leave empty-handed.

Take, for example, high inflation, which the American public has had to absorb over the past two years. While inflation has moderated, it’s not down enough for the Federal Reserve to cut interest rates aggressively. Lower rates are needed to spur consumer spending and lead to easier loan and credit terms, which helps the stock market.

“Back in January, the resounding take was for the Fed to stick the ‘soft landing’ by delivering more than 160 basis points of rate cuts,” J.P. Morgan analyst Madison Faller noted in a recent research note. “Now, those expectations have been pretty much cut in half. Both we and the Fed now expect just 75 basis points worth of easing, or three cuts, this year.”

On the upside, the JPMorgan report cited robust earnings as a major reason stocks have been so resilient over the past six months.

“Although the U.S. economy never fell into a recession, earnings did go through a correction. S&P 500 earnings were contracting for three straight quarters last year,” the report noted. “That earnings recession has now ended, with the last two quarters marking a return to profitability.”

Investors should expect more balanced market gains in the second quarter of 2024.

“While it’s true that the Magnificent Seven accounts for around 25% of S&P 500 earnings and drove much of the profit growth last year, we expect that growth to broaden throughout the year,” the report stated. “We’re already seeing this take place — a likely key reason why the rally has marched on even with fewer Fed rate cuts in the cards.”

That scenario should set up a profitable April and a more robust outlook for the second half of 2024 in multiple stock market sectors.

That’s music to a market investor’s ears, but due diligence is still needed.

If you’re kicking some tires on new stocks to add to your portfolio, go sector-hunting and target these attractive names that show considerable profit potential for the rest of the year.

Sector: Semiconductors

Stock: Qualcomm (QCOM)
Year-to-Date Performance: 17.06%

Think of Qualcomm as the Tom Hanks of the semiconductor sector. It’s steady, reliable, and always paying good dividends.

That’s Qualcomm all over.

The San Diego-based semiconductor stalwart just dropped its plans to purchase Autotalks, an auto industry vehicle chips maker. On the surface, that seems like bad news, but it’s really not.

The U.S. Federal Trade Commission opposed the deal, citing anti-competition issues. U.K. Trading Commission regulators also aggressively discussed thwarting the deal.

So, Qualcomm moved on and can now focus on its core business: making chips for mobile phones and other handheld devices.

That’s a money-making move, as the company significantly outperformed in the recent quarter, with revenues rising 5% to $9.94 billion. Sales in key markets like handsets and automobiles were particularly substantial — Qualcomm routinely cleans up against the competition in both areas.

 Add to the mix a robust 1.89% dividend payout, and QCOM is an easy addition to any growth-and-income portfolio these days.

Sector: Energy

Stock: Exxon Mobil (XOM)
Year-to-Date Performance: 16.26%

Exxon is another great income story, paying a 3.27% dividend. Additionally, crude oil futures prices are in liftoff mode in the first quarter of 2024 after a sluggish 2023, where producers saw prices fall by 10%.

That’s good news for an oil behemoth on the right track in 2024.

Famously yanked from the Dow Jones Industrial Average in August 2020 after 92 years, XOM is in the midst of an impressive rebound. Its new Mobile Lithium rollout, announced late last year, should be a revenue producer by 2027, according to company financial forecasts. That boosts the energy producer in the rising battery and electric vehicle market.

It’s not easy to buy stocks after their underlying financials have already started rising, but Exxon is still a solid portfolio addition for multiple reasons. Oil and gas are still vital cogs in the economy, and the dominance of green energy, if it happens at all, remains decades away.

The company is also well-managed and has a great dividend story (its dividend has increased yearly for the past 41 years.) XOM also boasts a solid balance sheet that should insulate the oil and gas provider from any sector pricing downturns.

If you can land an industry leader with a diversified business foundation (especially in oil production, refining, and distribution), and if it also pays an extraordinary dividend, don’t overthink it. Exxon fits the bill on each of those fronts.

Sector: Homebuilders

Stock: Lennar (LEN)
Year-to-Date Performance: 15.39%

Another early 2024 share price producer, Lennar, is firmly ensconced in a market of high demand and low inventory and is ideally positioned to take advantage.

That industry is housing — perhaps the most demonized (for its high home prices) and needed (people want to live in a nice house) industry across the fruited planes.

Warren Buffett, who never sidesteps a bargain, snapped up 152,000 LEN shares in June 2023. Buffett knows a cheaply priced stock when he sees one, and he knows Americans are demanding more housing. Hines, an investment management firm, recently pegged the U.S. housing shortage at 3.2 million homes.

If, as the current buzz on Wall Street suggests, the Federal Reserve cuts interest rates multiple times in 2024, Lennar would be uniquely positioned to profit, as lower rates would likely trigger significantly more housing starts.

Now is the right time to get in before the Fed begins curbing interest rates and lighting a fire under the simmering American residential housing market.

Sector: Telecom

Stock: Verizon Communications Inc. (ticker: VZ)
Year-to-Date Performance: 11.30%

Some income stories are better than others, and Verizon’s story is something else. In the first quarter of 2024, the company buzzed in with one of the biggest dividend payouts in the market, at a whopping 6.24% yield.

Verizon is also a powerhouse in the broadband and wireless markets. It has made major investments in 5G technology, which should accelerate an already healthy cash flow position.

Wall Street analysts are logging on to VZ, as the company readies for an April 22, 2024, quarterly report where it’s expected to report big revenue gains.

Frank Louthan, a telecom analyst at Raymond James, recently rated Verizon shares as an “outperform” in a research note from late March.

“The name (Verizon) remains defensive and trades near all-time low valuation, making the total return story compelling for patient investors,” Louthan noted. “The longer-term fundamentals of Verizon remain in good shape, with consistent results and mostly domestic, predictable, recurring revenue. With a 6.2% dividend yield, we believe the shares remain attractive.”

Steve Malcolm, an analyst at Redburn Atlantic, recently upgraded VZ from “sell” to “neutral,” calling for a $39 price target.

Sector: Technology Software

Stock: Salesforce (CRM)
Year-to-Date Performance: 14.46%

This San Francisco-based cloud software giant is making noise in the artificial intelligence (AI) market, and that pivot is worth a closer look for growth-minded investors.

The company recently announced its new AI-powered Einstein 1 platform and its Einstein Copilot AI chatbot assistant tool. Salesforce says it will merge the Copilot software into all its apps, with an estimated February 2025 release date.

That timeline has led analysts to express cautious optimism about CRM shares. Consider UBS, which calls for a 1% revenue rise stemming from its AI launch in 2025.

Even so, Salesforce’s AI play should pay continued dividends through the second half of 2020, while relying on substantial revenues clocking in regularly. In late February, CRM announced an 11% boost in total revenues and a 44% uptick in operating cash flow in the fourth quarter of 2023.

The company’s financial picture is so bright these days it just rolled out a 0.13% dividend to sweeten the pot.

Sector: Digital Finance

Stock: PayPal (PYPL)
Year-to-Date Performance. 9.09%

Growth-to-value transitions usually don’t earn any time on investors’ radar screens, but maybe they should.

Exhibit “A” is digital payment mainstay PayPal, which has endured a half-decade share price malaise (it’s down 35% over the past five years) and only now is showing signs of getting out of it.

Signs of renewed life are abundant. PayPal has over 430 million active users who help churn revenue daily. That’s fueled approximately $5 billion in cash flow for the company, which is a good sign for new CEO Alex Chris, who’s been on board since September 2023.

The company also benefits from external impactors that set it up ably for the future.

Take gig work, where up to 72 million Americans will work outside the traditional corporate employment structure in 2024. Gigsters and freelancers routinely are paid via digital apps like PayPal and Venmo, and that trend should ramp up as more disaffected workers opt to shun in-office work and work remotely for themselves.

Now should be a good time to step up to the plate with PayPal. The company is in the midst of a $15 million stock buyback campaign that launched in 2022. When a company commits to a share buyback rollout, that’s usually an indication management views its stock as cheaply priced.

Maybe you should, too, as PayPal is here for the long haul and stands as a flashing green light for value-minded investors looking to buy shares of a good company on the cheap.

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