With an 18.2 percent gain for the S&P 500 during the past 52 weeks, finding the best stocks to buy is a challenge. Yet, even after this year’s run up, fairly priced shares remain.
These 15 best companies to invest in are well-known names with market capitalizations from $21 billion to $91 billion. To find these gems, GOBankingRates included only shares with a reasonable forward price earnings ratio* and a strong three- to five-year projected growth.** Start your stock research with this list of top well-known stocks.
Dollar Tree Inc (DLTR)
Projected Earnings Growth: 13.53 percent
Forward PE Ratio: 18.54
One-Year Estimate: $105.24
TTM Revenue: $21.21 billion (TTM means trailing 12 months)
Market Cap: $23.3 billion
If you’re a bargain shopper, then you know Dollar Tree retail stores. Everything sells for $1 or less.
DLTR was founded in Chesapeake, Va., in 1986. With glowing third-quarter results, the company’s same-store sales rose 3.3 percent in this competitive retail environment — unlike other stores that struggled in 2017 — and improved profit 40 percent for the quarter. Dollar Tree is a member of the discount variety stores industry and enjoyed a 9.82 percent price increase during the last 52 weeks.
Aflac Inc. (AFL)
Projected Earnings Growth: 13.5 percent
Forward PE Ratio: 12.49
One-Year Estimate: $85.15
TTM Revenue: $22.65 billion
Market Cap: $33.5 billion
Unless you’ve sworn off of television, you’ll recognize the famous Aflac duck, the mascot of this accident and health insurer. Founded in 1955, the company has its headquarters in Columbus, Ga.
Aflac’s price has increased 19.74 percent during the previous 52 weeks and might be due for a pause. Despite the modest one-year estimate of $85.15, you’ll earn a decent 2.12 percent dividend while you wait for the price to advance.
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Carnival Corp (CCL)
Projected Earnings Growth: 12.94 percent
Forward PE Ratio: 15.52
One-Year Estimate: $72.71
TTM Revenue: $17.19 billion
Market Cap: $48.1 billion
Miami-based Carnival belongs to the resorts and casinos industry category and was founded in 1972. Up 18.20 percent the prior 52 weeks, analysts believe the stock has room to advance next year as well. And the 2.75 percent dividend payment is a nice bonus.
FedEx Corp. (FDX)
Projected Earnings Growth: 11.45 percent
Forward PE Ratio: 14.38
One-Year Estimate: $235.15
TTM Revenue: $60.95 billion
Market Cap: $58.2 billion
Despite whispers about Amazon venturing into delivery services, FedEx has little to worry about. FedEx has a strong hold on the eCommerce delivery service business, according to a recent Forbes story. This member of the air delivery and freight services industry category was founded in 1971 and is based in Memphis, Tenn. The company’s stock price grew 14.19 percent during the previous 52 weeks.
Southwest Airlines Co. (LUV)
Projected Earnings Growth: 11.21 percent
Forward PE Ratio: 12.37
One-Year Estimate: $66.16
TTM Revenue: $20.84 billion
Market Cap: $32.7 billion
Southwest Airlines outshines its peers with 44 years of sustained profitability. This regional airline industry member was one of the early low-cost airlines, founded in 1967 in Dallas. LUV’s stock price grew 16.04 percent during the prior 52 weeks and is forecast to hit $66.16 next year, a 21 percent growth. And, it’s one of the stocks billionaire Warren Buffett is known to invest in.
American Express Co. (AXP)
Projected Earnings Growth: 11 percent
Forward PE Ratio: 14.50
One-Year Estimate: $95.28
TTM Revenue: $29.48 billion
Market Cap: $81.4 billion
Financial firm American Express has been around for a long time. It was founded in 1850 and has its headquarters in New York City. The company was one of the first and most important express delivery businesses to come out of the U.S. western expansion before it evolved into a financial services titan.
Today, the company enjoys one of the most profitable credit card companies and travel agencies. During the previous 52 weeks, AXP garnered a lofty 29.60 percent share gain. For value investors, Zacks views American Express with optimism, yet you might want to buy on a dip after this year’s price run up.
Norfolk Southern Corp (NSC)
Projected Earnings Growth: 12.17 percent
Forward PE Ratio: 18.17
One-Year Estimate: $133.17
TTM Revenue: $10.23 billion
Market Cap: $37.2 billion
When you pause while a train passes your car, you’ve probably seen a Norfolk Southern locomotive, especially in the eastern half of the country.
Founded in 1883, Norfolk Southern has its headquarters are in Norfolk, Va. The company posted a 25.02 percent stock price increase the last 52 weeks. Railroads are enjoying solid business growth, thanks to President Trump’s pro-coal stance. Yet, wait for a pull back to jump on the NSC train.
Stanley Black & Decker Inc. (SWK)
Projected Earnings Growth: 10.8 percent
Forward PE Ratio: 19.99
One-Year Estimate: $182.47
TTM Revenue: $11.84 billion
Market Cap: $25.5 billion
Who doesn’t love a new Black & Decker kitchen appliance or drill? The company has been around since 1843 and is based in New Britain, Conn. With a healthy 52-week gain of 38.74 percent and 10.8 percent future earnings growth, this is one of the best companies to invest in.
Stanley Black & Decker belongs to the machine tools and accessories industry category. Jim Cramer of TheStreet likes SWK because it recently acquired the tool division of Newell Brands and spun off the slower-growing portions of its business. Earlier this year, it bought the venerable Craftsman brand from Sears.
Aetna Inc. (AET)
Projected Earnings Growth: 10.68 percent
Forward PE Ratio: 17.48
One-Year Estimate: $183.59
TTM Revenue: $62.2 billion
Market Cap: $57.5 billion
There are rumors that pharmacy chain CVS might be in the market for Aetna, according to TheStreet. Aetna is a healthcare benefits company with a presence since 1853. The Hartford, Conn.-based insurer focuses on health and life insurance along with annuity products. Up 37.44 percent the past 52 weeks, this healthcare plan provider might be worth a look before its share price climbs much higher.
Projected Earnings Growth: 13.43 percent
Forward PE Ratio: 15.42
One-Year Estimate: $87.61
TTM Revenue: $67.88 billion
Market Cap: $65.8 billion
Unless you live in a tiny town, Lowe’s and Home Depot own the home-improvement market. This Mooresville, N.C.-based company has been around since 1946.
Lowe’s price only advanced 11.29 percent during the last 52 weeks, yet, analysts predict healthy future earnings growth of 13.43 percent. Add in a projected $8 price increase, 2.07 percent dividend yield, and a Raymond James recommendation. Lowe’s might be another candidate for your “stocks to buy” list.
Mondelez International Inc. (MDLZ)
Projected Earnings Growth: 10.68 percent
Forward PE Ratio: 17.90
One-Year Estimate: $48.21
TTM Revenue: $25.57 billion
Market Cap: $63 billion
You might not recognize the Mondelez name right off, but you certainly know the company’s brands: Nabisco, Cadbury, Toblerone, Trident, Tang and more. Previously known as Kraft Foods, Mondelez International changed its name in 2012. The company is headquartered in Deerfield, Ill., and was founded in 2000.
MDLZ grew a negative 1.79 percent during the prior 52 weeks but expects a turnaround to double-digit earnings growth during the next few years. If the analysts prove correct, buy today and you might earn a 13.4 percent return next year. Dividend investors will like the 2.07 percent yield.
Projected Earnings Growth: 11.87
Forward PE Ratio: 19.62
One-Year Estimate: $265.31
TTM Revenue: $53.87 billion
Market Cap: $34.4 billion
Humana is based in Louisville, Ky., and was founded in 1961. This healthcare and insurance company is another household-name value pick. The company grew 15.63 percent during the last 52 weeks, just shy of the S&P 500’s 18.2 percentage change. Zacks Equity Research likes Humana because of its strong fundamentals, share buybacks and strong cash flows.
Marathon Petroleum (MPC)
Projected Earnings Growth: 18 percent
Forward PE Ratio: 14.1
One-Year Estimate: $68.24 billion
TTM Revenue: $60.96 billion
Market Cap: $30.9 billion
Marathon has been on fire with a 52-week 31.84 percent growth and could be one of the best stocks to buy. An outgrowth of The Ohio Oil Co. (1887), this oil and gas company is based in Findlay, Ohio. After a variety of mergers and divestitures, in 2011 the Marathon Petroleum Co. became a standalone oil and gas refining company.
Ameriprise Financial (AMP)
Projected Earnings Growth: 15 percent
Forward PE Ratio: 12.3
One-Year Estimate: $163.11
TTM Revenue: $12 billion
Market Cap: $23.7 billion
Price growth: 41.83 percent
Ameriprise advisors are happily growing their client bases, with a 9 percent AUM increase in September over the same month last year. The company also posted 41.83 percent 52-week price growth. In the short term, it’s unlikely the rapid growth will continue, but patient investors should keep an eye on AMP.
Deere & Co (DE)
Projected Earnings Growth: 19.79 percent
Forward PE Ratio: 15.6
One-Year Estimate: $148.45
TTM Revenue: $27.67 billion
Market Cap: $46.7 billion
John Deere is the name in farm and construction machinery. Founded in 1837, the company’s headquarters are in the heart of the country: Moline, Ill.
It’s difficult to believe this $46 billion company gained 43.07 percent in the prior 52 weeks. Yet, after such robust performance, you can expect that the stock might take a breather. Wait for a pull-back to invest in DE.
Before buying any stock, do your own research. Remember that stock market investing is risky and share prices can go up and down.
Quotes accessed Nov. 27, 2017. *Lower PE ratios might indicate that a stock is a good value. A forward PE ratio divides the current stock price by the company’s projected one-year earnings per share. **Stock screening methodology: Screened for stocks that were valued between $21 and $91.06 market capitalization, had projected three to five-year earnings per share growth between 10 and 14 percent and PE ratios between 12 and 20. Market capitalization is calculated by dividing outstanding number of shares by current share price.
About the Author
Barbara Friedberg, MBA, MS, brings decades of finance and investing experience. She is a former investment portfolio manager. Friedberg taught Finance and Investments at several universities. Her published work includes Personal Finance: An Encyclopedia of Modern Money Management, Invest and Beat the Pros–Create and Manage a Successful Investment Portfolio, and How to Get Rich; Without Winning the Lottery.