With the Dow Jones Industrial Average, the Nasdaq composite index, and the S&P 500 all down more than 20% from their recent highs, there is no doubt that the COVID-19 pandemic has pushed the US stock markets into bearish territory. In addition, social distancing measures used to control the spread of the SARS-CoV-2 virus have severely damaged the global economy and global supply chains, and have affected a number of industries, such as airlines. , brick and mortar retailers, and seated restaurants, in serious financial straits.
The good news is that this pandemic will end in time. Several pharmaceutical companies are testing a variety of new therapies that could shorten the clinical course of the disease and perhaps decrease its severity in acute cases, resulting in fewer deaths. In addition, many candidate vaccines are under development, some of which may be available for widespread use by mid-2021.
From an investment point of view, this coronavirus-induced correction should ultimately play out like almost every other bear market in history. Specifically, bear markets have rarely persisted for periods of more than two years, and most fade in approximately 14 months. This means that investors wishing to buy high quality stocks and hold them for at least five years should come out of this chaotic period in exceptional shape, financially speaking.
What investment vehicles are the best buys right now? Here is a breakdown of 30 of the most attractive exchange traded funds (ETFs) on the market today.
3 high quality ETFs
One of the easiest and best ways to invest is to buy ETFs with low expense ratios. By doing so, you can gain broad exposure to specific economic sectors without buying dozens of individual stocks. While there are literally hundreds of ETFs to choose from, the IShares Nasdaq Biotechnology ETF (NASDAQ: IBB), the Vanguard Consumer Staples Index Fund ETF Shares (NYSEMKT: VDC), and the Vanguard Information Technology Index Fund ETF Shares (NYSEMKT: VGT) are three of the most popular among passive fund enthusiasts – and for good reason.
The iShares Nasdaq Biotechnology ETF has an expense ratio of 0.47%, which is reasonable for a top performing fund. This fund allows investors to take advantage of the hot growth of the biotechnology industry, without the appalling volatility that comes with owning individual biotechnology stocks. Prior to this slowdown, the iShares Nasdaq Biotechnology ETF was up over 300% in the past 10 years. This is well above the returns on capital generated by the main American stock market indices over the same period.
The Vanguard Consumer Staples Index Fund has both an ultra-low expense ratio of 0.10% and a remarkable dividend yield of 2.76%. This fund is made up of many first-class defensive stocks that replicate the MSCI US Investable Market index. While the Vanguard Consumer Staples Index Fund has underperformed wider markets over the past decade, it has also lost much less in value during the current sale. As such, this fund is a great way to collect a healthy dividend and keep capital in an uncertain market environment.
The Vanguard Information Technology Index Fund is a real gem in the ETF world. This technology-driven ETF has an expense ratio of just 0.10% and an annualized return of 1.4%, and has generated overwhelming returns for investors in the past 10 years. In addition, the Vanguard Information Technology Index Fund has so far held up better than all the major stock market indices in 2020.
12 first-rate value stocks that pay first-rate dividends
Blue chips are companies with strong balance sheets, proven economic flukes and healthy free cash flow. They frequently make the esteemed list of Dividend Aristocrats, a select group of companies that have raised their dividends for at least 25 consecutive years. As a result, these high-end stocks and coveted passive income generators tend to withstand economic downturns well. Here are 12 blue tokens that are worth buying right now.
Abbott Laboratories (NYSE: ABT) is a medical device and molecular diagnostic company. The company has raised its dividend for 48 consecutive years, which easily makes it a dividend aristocrat. Although Abbott’s shares are quite expensive from a prospective price / benefit perspective, the company could benefit greatly from its recently approved COVID-19 molecular diagnostic tests. At a minimum, Abbott is expected to remain an exceptional passive income vehicle and should continue to be generally sheltered from this marked downturn due to its premier portfolio of essential health products.
Apple (NASDAQ: AAPL) is today one of the largest and most visible technology companies in the world. Despite this, the company’s actions were hit hard this year by the COVID-19 pandemic. It’s not at all surprising, given that Apple has already said it will miss Wall Street’s financial targets in 2020. This major slowdown, however, should prove to be a once-in-a-lifetime opportunity to pick up some of the giant’s stocks cheap technology. Apple currently offers a modest 1.26% return, and Wall Street has the company’s 12-month average price target of $ 310.90 per share. This represents a healthy bullish potential of 28.7%.
Bristol Myers Squibb (NYSE: BMY) became a juggernaut following the acquisition of Celgene. The company is currently trading at less than 3 times its prospective sales, it offers an above-average dividend yield of 3.26% and it sports several megablockbuster drugs such as Opdivo, Revlimid and Eliquis. Although nothing is guaranteed on the stock market, Bristol is likely to generate higher returns than investors over the next five to 10 years.
Chevron (NYSE: CVX) is a mega oil and gas merchant. Nonetheless, the company’s stock was flattened this year in response to the ongoing oil war between Russia and OPEC, which has pushed crude oil prices down to the lowest $ 20. On the bright side, Chevron has cut costs to protect its coveted dividend. Now Chevron may have to rethink its dividend policy if crude oil prices don’t rebound quickly enough. The company’s return, after all, is currently 6.78%. The big picture, however, is that Chevron should eventually rebound and continue to pay a respectable dividend over the long term.
JPMorgan Chase (NYSE: JPM) is a titan of the financial services industry. However, the bank’s shares have lost almost 40% of their value since the start of 2020 due to fears of a fall in interest rates, as well as the potential of a prolonged recession caused by the COVID pandemic- 19 in progress. As JPMorgan’s stock could continue to collapse over the next few weeks as the public health crisis worsens, investors should snap this falling knife. JPMorgan has nearly $ 900 billion in cash, it offers a dividend yield of 4.11% and it is an American institution in many ways. There is no plausible scenario where this leading bank stock does not recover over the next five years.
Johnson & Johnson (NYSE: JNJ) is a diverse health giant. And the dividend aristocrat status of the company is well deserved thanks to its history of raising its dividend for almost 58 consecutive years. In addition, J&J is one of only two publicly traded companies with AAA Standard & Poor’s credit ratings. The dividend yield from J&J is not really a concern, at 2.85%. But the company has a long history of beating wider markets in terms of total return on capital, including its dividend. J&J, in turn, undoubtedly deserves a place in any type of portfolio.
McDonalds (NYSE: MCD) is the quintessential American fast food restaurant. While the company’s revenue has struggled in recent times due to the influx of many competitors and a change in American eating habits in general, McDonald’s still forecast a nice increase in revenues next year before this pandemic sets in. The company’s massive investments in delivery services and new technologies such as self-service kiosks are expected to be a boon for its business in 2021 and beyond. Yet McDonald’s is a dividend aristocrat, it offers a respectable return of 3.1% at current levels and it has a decent cash reserve. McDonald’s stock is therefore one of the safest passive income games in this turbulent market right now.
Pfizer (NYSE: PFE) started the year on a sour note but has since found its place as investors flocked to its first-rate dividend yield of 4.62%, a solid balance sheet and above-average short-term prospects. The big draw of this pharmaceutical titan is its high-growth prescription drug portfolio that includes products such as Vyndaqel, Ibrance and Xeljanz, combined with the next spin-off from its legacy business scheduled for later this year. The bottom line is that the days of Pfizer as one of the worst components of the Dow Jones seem to be coming to an end.
Coca Cola (NYSE: KO) had a historically poor first quarter due to the impact of the coronavirus on restaurant traffic, major sporting events and major public entertainment events in general. Even now, however, Coca-Cola’s stock is anything but cheap, for a variety of reasons. In short, Coca-Cola has been a great cash cow for generations, and its dividend is a big asset for income investors. Currently, Coca-Cola stocks are yielding 3.73% juicy, which is well above average for a game of everyday consumption. So while the company’s first and second quarter profits are likely to be woefully terrible, it is a blue chip stock that every investor should want to pick up on this setback.
Clorox (NYSE: CLX) has been a rare bright spot on this austere market. Investors have piled on Clorox this year, likely in anticipation of a surge in demand for disinfectants such as Clorox bleach. In 2020, the company’s stock gained a healthy 15.6% due to its connection to the coronavirus. The bad news is that Clorox shares are now trading at almost 28 times earnings, making it one of the most expensive blue chip stocks on this list. That said, its dividend yield still stands at 2.36% attractive, and it should remain hot capital as long as the coronavirus retains a virtual monopoly on the news cycle.
Walt disney (NYSE: DIS) is downright theft at these levels. After a terrible first quarter, the company’s shares are now hitting their five-year lows and sporting a modest dividend yield of 1.81%. Now, the hard truth is that Disney theme parks are going to be expensive to maintain during the lockdown, and there will be a sharp drop in box office revenue for much of 2020. This cannot be helped in a global pandemic. But Disney is a proven long-term winner due to its exceptional studio entertainment properties such as the Frozen and Star Wars franchises, among many others. Conclusion: Disney’s share will almost certainly continue to fall in the coming weeks, but long-term investors should certainly take advantage of this weakness. This top-notch stock, after all, will likely post a staggering reversal once the pandemic is over.
Verizon Communications (NYSE: VZ) is a telecommunications giant. The company’s shares have fallen about 11% this year, but it’s not all that bad when you consider the poor performance of the markets in general so far in 2020. Investors seem to be staying with Verizon in the the wake of this slowdown due to the company’s exceptional dividend yield of 4.45%, leadership in the field of 5G technology and partnership with Disney around the Disney + streaming service. Verizon has one of the weakest balance sheets on this list and faces increasing competition. But the big picture is that Verizon stocks are just too cheap at 11.7 times earnings, especially for a company that offers a reliable and above-average dividend.
2 megacap growth shares
Megacap companies, or companies with market capitalizations of at least $ 200 billion, are rarely coveted for their growth prospects. Instead, these towering industry figures are generally viewed as first-rate passive income vehicles or capital preservation games. These two titans of e-commerce absolutely demolish this stereotype.
Alibaba Group (NYSE: BABA) has been a big winner since its IPO in 2014. Chinese e-commerce, cloud computing, digital media and the mobile payment giant, however, will likely only continue to increase in the months and years to come. The main reason is that Alibaba has invested heavily in new technologies to stay at the forefront of its most lucrative markets. Equally important, the Chinese cloud computing market is expected to experience explosive growth over the next decade. Alibaba is therefore well positioned to offer above-market returns for the foreseeable future, despite its monstrous market capitalization of $ 510 billion.
Amazon.com (NASDAQ: AMZN)has transformed dozens of its first shareholders into multimillionaires. Amazon Prime, with its free shipping and online entertainment component, has now attracted more than 150 million members, and the company has developed a first-class data management business known as Amazon Web Services. Amazon, indeed, has made its way to the heart of American life. Even if the company’s market capitalization is $ 949 billion, its stock should still generate solid gains over the next decade, thanks to its loyal clientele and its highly profitable web services segment.
3 large cap growth stocks
Like their mega-capacity counterparts, large-cap stocks, defined as companies with a market cap of $ 10 billion or more, tend to attract conservative investors or those looking for a secure dividend. However, these three large-cap stocks are unique in that they are best viewed as first-rate growth stocks.
BioMarin Pharmaceutical (NASDAQ: BMRN) is a manufacturer of rare disease drugs that offers several products on the market. So far this year, BioMarin’s shares have essentially traded sideways, down 0.4%. The company has been able to swim against the tide during this pandemic because many of its patients simply cannot give up treatment without dire consequences. In addition, BioMarin is approaching two major regulatory decisions for its next set of product candidates. The main attraction here is that BioMarin’s turnover could realistically double in five years, and it operates in one of the few segments of the economy that should be immune to the COVID pandemic- 19.
DexCom (NASDAQ: DXCM) is a medical device company specializing in diabetes. The company’s shares gained a majestic 19% in 2020, thanks to the overwhelming success of its G6 continuous glucose monitoring (CGM) system. Although DexCom’s shares are among the most expensive in the health sector at the moment, the rich valuation of the company should not scare you. Almost half a million adults worldwide are living with diabetes, and that number is expected to increase significantly over the next decade. DexCom’s CGM franchise is poised to play an essential role in the fight against this raging pandemic, which should translate into really eye-catching revenue figures.
MercadoLibre (NASDAQ: MELI) is the undisputed king of electronic commerce in Latin America. Despite this, the company’s actions were battered and bruised last month by the panic of COVID-19. COVID-19 has only recently started to have a major impact in Latin America, and the good news is that it is not expected to have any long-term consequences for MercadoLibre’s e-commerce activities. Now the company’s short-term sales could suffer a considerable blow as Latin America implements its shelter mandates on the spot. But this barrier to economic activity will not last forever. So, bargain hunters may soon want to jump on this battered piece of e-commerce.
3 mid-cap growth stocks
Investors often overlook mid-cap stocks or companies with market capitalizations ranging from $ 2 billion to $ 10 billion. But they shouldn’t. Mid-cap stocks often offer a compelling mix of healthy growth and security. In fact, mid-cap stocks have always been among the best growth drivers on the market overall for most of the past decade. With this theme in mind, here are three mid cap stocks that should be current deals at current levels.
Intercept Pharmaceuticals (NASDAQ: ICPT) is a medium-sized biopharmaceutical company focused on the development of drugs for non-viral liver disease. The company’s shares have lost more than half their value this year due to a regulatory delay for its candidate drug for nonalcoholic steatohepatitis (NASH), Ocaliva. Specifically, the Ocaliva advisory committee meeting was moved from April 22 to June 9 this year due to COVID-19. In turn, Intercept stocks could be one of the best deals in the whole market right now. Although Ocaliva is not a foolproof slam dunk to become the first drug ever approved for NASH, the fact is that it would easily increase sales by $ 2-3 billion if it clears this regulatory hurdle. key. The big problem is that Intercept’s market capitalization is currently hovering around only $ 2 billion at the time of writing. As such, there is a real hit that Intercept’s shares could double or even triple in value by this time next year.
Sarepta Therapeutics (NASDAQ: SRPT) is a company specializing in rare diseases and gene therapy with a virtual monopoly on the treatment of muscle wasting disease known as Duchenne muscular dystrophy (DMD). The company’s shares have moved at the same rate as the broader markets this year, probably due to its once rich valuation. What is important to understand is that Sarepta’s shares are most likely trading at less than 0.5 times the sales of 2026. There are many moving parts that could drastically change this outlook, but the result is that Sarepta stock is very cheap at these levels. Despite several potential DMD competitors, after all, Sarepta is still the only game in town.
Diabetes care in tandem (NASDAQ: TNDM)is another fast growing diabetes game, thanks to its disproportionate share of the insulin pump market. The company’s shares have caught fire in the past three years due to the rapid growth of its market share in the insulin pump industry. And in 2020, Tandem’s share was even able to generate a modest gain of around 3%, which undoubtedly reflects the high demand for its insulin pumps for people with type 1 and type 2 diabetes. Wall Street’s current consensus target implies that Tandem’s shares could rise 44.9% further in the next 12 months. As the diabetes market grows by leaps and bounds, this optimistic outlook does not seem at all unreasonable.
3 small cap growth stocks
Small-cap growth stocks are generally the first group of stocks to lose the favor of a crisis. These stocks are generally more risky than mid and large cap stocks. As the market slips away, some small-cap stocks default exceptional deals. The following three names correspond to this description with a T.
Pharmaceutical catalyst (NASDAQ: CPRX) is a manufacturer of orphan drugs that sells Firdpase, an FDA-approved drug for the treatment of Lambert-Eaton Myasthenic Syndrome (LEMS). Firdapse competes with another recently approved LEMS drug, but that drug has not yet gained a significant market share. In fact, there are many good reasons to believe that this rival LEMS drug will never turn into a serious competitive threat. However, the market treated Catalyst’s shares as if sales of Firdapse were to collapse. Stressing this point, Catalyst’s action is trading at an absurd turnover of 1.87 times 2021. Although this small-cap biopharmacy has a high risk profile, the market is probably going too far with this valuation at the lowest. Catalyst, in fact, should finally get rid of this key overhang to become a top growth stock in the next 12 to 18 months.
Novavax (NASDAQ: NVAX) is a pre-recipe vaccine company. Biotechnology stocks rose nearly 300% this year due to a successful reading of the first results for its experimental flu vaccine, dubbed NanoFlu, combined with its entry into the race to develop a vaccine for COVID -19. Novavax is preparing to submit the regulatory application for NanoFlu to the FDA for consideration, which means it may be available for next year’s flu season. Estimates vary widely, but the current consensus is that NanoFlu generates approximately $ 740 million in peak sales. This is great potential for a company with a market capitalization of $ 801 million. So, if NanoFlu does get the FDA blessing, Novavax’s stock should increase. The main risk factor associated with this biotech stock is that the FDA can request additional clinical data before approval, which is certainly not out of reach.
Wyndham Destinations (NYSE: WYND) is a vacation and exchange company. The company’s shares have lost more than 63% of their value this year, thanks to the impact of COVID-19 on the pleasure travel industry. Wyndham, for its part, recently withdrew its financial forecasts and suspended share buybacks due to the uncertain outlook for the industry due to this deadly respiratory illness. The bad news is that Wyndham’s action has probably not bottomed out yet. In fact, the demand for quiet travel accommodations is unlikely to rebound in 2020. But if you’re ready to keep this stock for five years, it should pay off well after these huge declines. Wyndham’s underlying business model is still a great success, after all. We just have to go back to the point where tourism – especially international tourism – is one thing again.
3 homemade stocks
Domestic stocks are stocks that appear grossly mispriced relative to their long-term value proposition. These types of high-risk, high-yielding stocks should never constitute an inordinate portion of a portfolio, but they are sometimes worth holding in small doses. The following house stocks offer investors an attractive risk / reward profile, especially after their difficult start until 2020.
Canopy growth (NYSE: CGC) is a medical and recreational cannabis company operating in Smiths Falls, Ontario. Canopy is worth a detour, as it is reasonably well capitalized and a leader in cannabis production, product diversity and annual sales, and it has undergone a recent management shift which should lead to a more cost-conscious approach to creating value. Now, this legal marijuana business will certainly not be a big winner for shareholders anytime soon because of the different headwinds facing the industry as a whole. But Canopy’s action could produce stellar gains for investors wishing to hold for at least 10 years. Eventually, the legal cannabis market will become a very lucrative commercial space, which bodes well for industry leaders like Canopy.
Delta Airlines (NYSE: DAL) is one of the best known airlines in the world. Unfortunately, the company’s shares exploded this year due to the dramatic drop in air travel resulting from the COVID-19 crisis. In fact, Delta stocks are down 64% from their 52-week highs right now. The bad news is that Delta’s stock should surely suffer more in the weeks to come. This is an inevitable result, with demand for commercial air travel reaching historic lows. However, like some of the other names on this list, Delta’s actions are expected to rebound strongly after the pandemic.
Virgin Galactic (NYSE: SPCE) is a leader in the race to make space tourism a viable industry. Virgin Galactic shares fell nearly 15% this year due to the possibility of a recession and, as a result, lower demand for space tourism. But this sale could be a perfect opportunity to buy stocks. At the end of the decade, Virgin Galactic could prove to be a leading innovator who makes space tourism a possibility for a broad band of society – not just millionaires and billionaires with money to burn. Virgin Galactic may never fully achieve this lofty goal, but this new venture certainly qualifies as a possible home game.