Are These The Best 3 Stocks To Buy Now?
Ali is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Investors have been left scratching their Foolish heads in these unstable times trying to find the best balance possible of having some security and growth. Europe continues to be a big uncertainty, Asia has experienced decelerating growth, and of course the United States has been showing only tepid growth at best.
Obviously, bonds, savings account, and/or certificates of deposits don’t look like a nice option when we see they give a negative real rate of return. Commodities continue to be excessively volatile. And real estate, regardless of how the mainstream media tries to spin it, is still years away from clearing the “shadow inventory” that many estimates show is in excess of a large four million homes. However, investing in diversified companies, such as these three below, should provide returns that outperform the market in the long run.
Consumer and healthcare products behemoth Kimberly-Clark (NYSE: KMB) is a well-respected organization with numerous well-known products such as Huggies diapers and Kleenex facial tissues. The stock has had a nice run the past year and currently is sitting right near its $83.33 52-week and all-time high, which at first glance makes it seems overvalued.
However, upon closer inspection, Kimberly-Clark looks attractively priced trading at a strong 3.6% yield while the average Fortune 500 company is paying a considerably lower 2.0%. Moreover, with commodity costs coming down the past number of months, KMB should be a great beneficiary as their input costs as a result will decrease and in turn margins and profits increase leading to most likely more dividend hikes. I’d be a buyer of KMB for the long term.
Healthcare giant Johnson & Johnson (NYSE: JNJ) is a world-renowned organization with ubiquitous products that many people worldwide have used including, Listerine, Band-Aid adhesive bandages, Neosporin, and of course its name-sake products. Moreover, JNJ has the ultra-rare distinction of being just one of only four companies left in the world with the highest and coveted AAA credit rating, giving it access to some of the cheapest debt around.
The company once again hiked its dividend this past quarter as it has beautifully done for decades and now pays a very nice 3.7% dividend yield. Moreover, as hundreds of millions of consumers worldwide continue to be raised out of poverty and into better living standards in the coming decades, JNJ should be a great beneficiary, as well as shareholders through more dividend hikes. I’d be a buyer of KMB for the long-term income investor.
United Technologies Corporation (NYSE: UTX) is a well-diversified conglomerate with many well-known brand names in their respective industries, such as Otis in the elevator space and Pratt & Whitney regarding aircraft engines. The company has an enviable operating history and a relatively stable earnings base making it a great long-term holding for income investors. With a respectable 2.8% dividend yield that, when looking at historical precedent, is set to be raised in the next two quarters, UTX fits the billing as a great long-term income holding. Moreover, UTX should experience even more growth as the general economy recovers, giving investors more assurances that the stock and dividend should continue to move higher in the coming years.
As always, respectful comments and questions are always welcome on the message board below and please know any viewpoints are simply just the opinion of the blogger. I always strongly recommend every investor to do follow-up research and due diligence for the sake of their financial health.
Prohomes owns shares of Johnson & Johnson, Kimberly-Clark, and United Technologies. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services recommend Johnson & Johnson and Kimberly-Clark. 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.