3 Stocks to Buy Even on a Bad Day
Cecil is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
What do you do when the market becomes bearish? Do you start selling of all your stocks, or do you look out for a few companies that are really worth it? Here I look into a couple of stocks that will give you a good return, as long as you stick with them long term.
Microsoft (NASDAQ: MSFT)
The growth aspect of this company, which is already considered the market leader of the PC industry, is immense. The company's balance sheet is rock solid and without doubt, one of the best in the world; Microsoft only has a $12 billion in debt, whereas its cash totals a staggering $63 billion. For shareholders, Microsoft seems to be a great stock to hold on to; the dividend payout for Microsoft is $0.92. Over the past 5 years, the dividend payout has nearly doubled. The annual yield for this stock is in the 3% range, which is pretty decent. The share buy backs have reduced considerably over the last 5 years; in 2008 the outstanding shares were about 9.35 billion, and for the last year the total has stabilized to about 8.4 billion.
When we look at the trailing 12 month earnings per share, Microsoft has a decent figure of $2.73. With a couple of releases coming up later this year, including the hyped Windows 8, Windows Phone 8, and Windows RT, things look interesting for Microsoft. The chances of growth are very high, especially because these platforms are backed by some of the best hardware from companies like Nokia, Qualcomm and Intel. Buy this stock at around $30.
Google (NASDAQ: GOOG)
The company that created the Android, and the brain behind the best search engine around, Google is a name familiar to anyone using the internet. You may ask why this stock is worth the buy even though it’s pricey, and the simple reason is that this company is stable. The PE ratio is 22.1 and it is expected to come down to about 17.1. Moreover, the earnings per share is about $8.30, which is pretty strong; the earnings per share have been stable for the past year or so.
Google has recently been on an acquisition spree, which includes buying Motorola Mobility and Zagat. Apart from this, Google seems interested in scooping up patents from companies like IBM; this suggests that the company is looking for expansion in a wide range of ventures. I feel that this stock still has more room to grow, which is why I think this stock will remain a must-buy even when it hits $850.
Qualcomm (NASDAQ: QCOM)
With the rise in the smart phone and growth of the wireless sector, Qualcomm has contributed to the growing need of this sector by providing SoC chips for mobile phones from companies like LG, Samsung, and RIMM. The semi-conductor manufacturer has a lot more growth up ahead of it. The balance sheet of the company is very strong; it has about $13.5 billion in cash and a total debt of only $1.45 billion. This makes it a company that can take a couple of calculated risks and still end up doing well in times of macroeconomic challenges.
Qualcomm also provides you with a decent dividend payout of $1 per share annually. The only drawback with this stock seems to be with its share count; though the company has a buyback program, total shares have been rising. The present number of outstanding shares is at about 1.71 billion. Analysts say that as this share is still in its growing stage, the share count shouldn’t be a problem.
To conclude, I feel that these stocks will make a decent buy on any given day, as they are each backed by a very strong financial background; as such these companies I don’t see them failing anytime in the future.
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ceciljohn2002 has no positions in the stocks mentioned above. The Motley Fool owns shares of Google, Microsoft, and Qualcomm. Motley Fool newsletter services recommend Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.