Companies that tend to be highly cyclical, such as commodity stocks, were not included. The stock has performed strongly over the last decade, averaging a 20.2% total return per year. P/E values have fluctuated between 6.8 and 81.3 over the last five years, and the current P/E is 18.5. Analysts project 28.6% EPS growth next fiscal year, which is below the five-year average yearly growth estimate. Other potential bright spots include the firm’s oral obesity drug, currently in clinical trials.
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They predict earnings growth of 18% over each of the next three years, which is why CDNS is on this list of the best stocks to buy. Many investors also do technical analysis of a stock, which means analyzing historical movements in the stock’s price to attempt to predict future movements. If you want to go this route, we have detailed overviews of how to research stocks and how to read stock charts, including key terms to know. It’s tough to generalize, but high interest rates make it more expensive for companies to borrow money, which can negatively impact their earnings and profitability.
The Pros’ 10 Best S&P 500 Stocks to Buy Now
Growth investors prioritize a company’s future potential over its current business metrics or fundamental market valuation. Growth investing is generally considered a more offensive investment style than value investing. Growth stocks have historically performed better during periods when interest rates are low or falling and corporate earnings are growing. Growth stocks are public companies growing their profits, revenue or cash flow at rates well above their competitors and the market at large. Investors choose growth stocks to earn profits from the rapid price appreciation they promise.
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Wayne Duggan has a decade of experience covering breaking market news and providing analysis and commentary related to popular stocks. News & World Report and a regular contributor for Forbes Advisor and USA Today. Anticipating earnings increases is the goal of conventional stock picking in both fundamental analysis and technical analysis.
The current reading is 25.3, with a forward P/E ratio of 16.5. After rallying throughout 2023 the P/E is now 33.0 with a Forward P/E of 21.4. Given its recent and projected earnings growth, its forward P/E ratio seems to be a fair valuation for a stock that has averaged annual total returns of 20.6% over the past decade. Income-oriented investors will appreciate Diamondback’s juicy 4.6% yield. And the shares trade at just 10.2 times the consensus of analysts’ expected earnings for the next 12 months. The consensus price target for Diamondback’s shares is an average $222.04, which implies a gain of roughly 9% from the energy stock’s recent close.
Best Growth Stocks to Buy for the Long Term
At 7.1%, T-Mobile has the second-highest buyback yield on this list. That, combined with EPS and sales growth, have helped TMUS’s total return rally an average of 17.4% per year over the past decade. After posting losses for many years, LYV became profitable in 2022 and has seen big earnings growth since. Analysts estimate the company will average an annual EPS increase of 41.9% over the next fiscal year and a 7.8% sales increase. Cadence’s sales related to artificial intelligence (AI) tripled in 2023, and analysts at Zacks Investment Research expect even faster growth in 2024.
Some, like stocks, generally experience bigger ups and downs than investments like bonds and cash. All stocks on the list are covered by Bank of America analysts, and the stocks chosen typically remain on the list throughout the quarter unless coverage is dropped or an analyst’s recommendation changes. Fidelity National Information Services is a leading global provider of financial technology solutions for merchants, capital market firms and banks.
- Last year, the software provider reported cash and investments worth $130 billion, on top of net operating cash flow of $77 billion.
- For each stock included on the list, analysts highlight unique catalysts that are likely to occur before the end of the quarter.
- Bank of America has a “buy” rating and $450 price target for ISRG stock.
- A broker is a licensed professional who can buy and sell stocks on your behalf.
- Still, Reckitt’s brands command premium prices in attractive categories across consumer health and home care.
Generally, value stocks feature attractive fundamental metrics, such as low price-to-earnings (P/E) and price-to-sales ratios (P/S). Value stocks often have profitable businesses and pay relatively high dividend yields. Because most growth stocks price in expectations for future growth, they tend to trade at high valuations relative to their current businesses. Yelp is an online platform that provides user reviews and information about businesses. Quarterly earnings per share have been erratic, moving between positive and negative since the second quarter of 2021. Due to earnings volatility, the P/E ratio has also been erratic, running from about 12 to above 100 over the past five years.
These undervalued stocks of high-quality companies are attractive investments today. In addition to trading and investing he’s widely published and coaches individual clients on the finer points of gaining an edge in the market. While the company’s P/E ratio is 27.9, which is slightly pricier than the 23.6 for the broad market in the form of the S&P 500, YMM still has much higher growth prospects than the typical S&P 500 stock over the next five years.
“We believe this quarter represents the trough in terms of digital profitability and that losses will be less severe going forward, with the goal of digital profitability before football season of 2023,” says CFRA analyst Arun Sundaram (Buy). However, many analysts think that Caesars has not only found the bottom – but that it’s also going to be one of the best S&P 500 stocks over the next year or so. However, what’s interesting to many investors is the potential for this stock to deliver big-time gains over short periods of time.
There are a bunch of reasons for this, some more defensible than others. What’s less commonly understood is that Strong Buy recommendations, while not nearly as rare as Sell calls, are in somewhat short supply too. Profit and prosper with the best of Kiplinger’s advice on investing, taxes, retirement, personal finance and much more.
That makes it a powerful tool for compounding wealth over the long term. However, it’s worth emphasizing that 10% is the average annual return of the index. In some years, the index does much better than that, but in other years, it does much worse.
Growth stocks are also particularly sensitive to rising interest rates. Discounted cash flow models are commonly used by fund managers who value future cash flows lower when the discounted interest rate is higher. In other words, the lower the discount rate, the higher future cash flows are valued today.
Sure, the stock is in its own bear market and off more than 20% in 2022 alone. But the numbers above should encourage investors looking beyond Wall Street’s short-term disruptions. Semiconductor giant Micron Technology (MU, $73.32) is one of several beaten-down technology stocks that the analyst community remains very bullish on in 2022. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more. At the other end of the ratings spectrum stands the Street’s highest recommendation of Strong Buy. A total of 23 stocks make the cut there, as you can see in the chart below. UnitedHealth, Emerson Electric and Microsoft top the list of stocks scoring rare Strong Buy consensus ratings. “We remain intrigued by the generational increase in funding” for projects driven by the Infrastructure Investment and Jobs Act of 2021, write analysts at investment firm Raymond James. Delta should generate per-share earnings of $7-plus in 2024 and more than $10 per share beyond, “which is still not close to being priced into the stock,” they say.
Caesars Entertainment (CZR, $51.60) is the parent company of the iconic Caesars Palace in Las Vegas, as well as other newer resorts and digital gaming offerings. And while it’s one of the smaller stocks on this list, it also enjoys the rosiest outlook by Wall Street analysts, who not only view the stock as a Strong Buy, but believe on average that it will more than double over the coming year. A great example of this type of market growth is the AI industry. Over the last few years, AI technology has become widespread, and many AI stocks have massively increased in value. But the problem with investing in any singular stock is that you have to see those trends coming before they happen — and people, even professional investors — are statistically unlikely to accurately predict the future.