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As 2023 has shown us, the stock market can be a veritable wealth-building machine. After the 2022 bear market, Dow Jones Industrial Average While reaching record highs, S&P500 and Nasdaq Composite In 2023, they rose by 24% and 43%, respectively.
No matter what happens to investors in the new year, whether it’s a continued march to new highs in the major indexes or the most predicted recession in history, there are some amazing trades for opportunistic investors. It is still possible to find it. .
Here are 10 standout stocks that could make you richer in 2024.
Image source: Getty Images.
1. Alphabet
The first blue-chip stocks have all the tools and intangibles they need to deliver to shareholders in the new year. alphabet (Google 0.54%) (GOOG 0.57%)the parent company of ventures such as the world’s leading internet search engine Google and streaming platform YouTube.
There were fears that ad spending would slow in 2023, but Alphabet’s insurmountable moat has shielded it from much of the turmoil. In December, Google accounted for 91.61% of the world’s Internet search share. Moreover, the company has maintained at least a 90% share in monthly internet searches worldwide since March 2015. As long as this moat exists, Alphabet can generate significant cash flow that can be directed toward high-growth initiatives.
Speaking of high-growth initiatives, cloud infrastructure service Google Cloud has made the transition to recurring revenue, and YouTube, the second most-visited social site on the planet, has increased the number of short video views per day. has increased by approximately 670%. From 2021 onwards, many videos will be less than 60 seconds).
Alphabet stock remains historically cheap and ripe for further upside.
2. NextEra Energy
Another industry leader that could expand investors’ portfolios in 2024 is the largest power company by market capitalization. NextEra Energy (Hey 0.68%). Utilities suffered significantly last year as bond yields soared. However, utility yields are back in the spotlight as the US Federal Reserve is expected to begin a rate cutting cycle in the new year.
What sets NextEra Energy apart from dozens of other publicly traded electric companies is its approach to green energy. Almost half (34 gigawatts) [GW]) Of the company’s 70 GW of operating capacity, 23 GW comes from renewable energy, including 23 GW from wind and 6 GW from solar, the highest level for both energy sources by any utility in the world. A focus on renewable energy has lowered the cost of electricity generation, driving adjusted annual profit growth by almost 10% since 2012.
Additionally, public works meet basic needs. Whether you own or rent, you likely need electricity to power your appliances and possibly your HVAC system. This provides predictable operating cash flow year-to-year and inter-annual.
3.AT&T
Telecom company AT&T (T -0.12%) is another stock that could make opportunistic investors even richer in 2024. Legacy telecom stocks spooked by US research report, but wall street journal In July, it claimed there could be significant replacement costs and environmental and health-related costs associated with using lead-coated cables, but these claims don’t seem to make much of a fuss.
Importantly, AT&T is operating successfully on a commercial basis. Upgrading the network to support 5G download speeds will increase wireless revenue and encourage users to consume more data (data being the most profitable profit generator for the company’s wireless division) , increasing the total number of broadband customers.
AT&T has also made impressive progress on its balance sheet. From March 2022, the company will separate its content division WarnerMedia and merge it with Discovery. warner bros discovery. This new organization took control of certain receivable lots previously held by AT&T. Including organic paydowns, AT&T’s net debt fell by more than $40 billion to $128.7 billion.
4. Annaly Capital Management
One of my top 10 predictions for the stock market in 2024 is that we will see the end of what is currently the second longest inverted yield curve on record. The combination of the Federal Reserve’s dovish monetary policy and the normalization of the yield curve has created an ideal environment for mortgage real estate investment trusts (REITs). Analy Capital Management (NLY -1.76%).
A mortgage REIT’s operating model involves borrowing money at short-term interest rates and using those funds to purchase high-yielding long-term assets, such as mortgage-backed securities. If interest rates fall and the yield curve normalizes in the new year, short-term borrowing costs will fall, allowing companies like Annaly to enjoy higher net interest margins.
Additionally, Annaly Capital Management almost exclusively purchases agency assets. Agency securities are guaranteed by the federal government in the event of default. This additional protection allows Annaly to freely utilize leverage to support his impressive 13.4% dividend yield.
Image source: Getty Images.
5. United Health Group
The fifth standout stock with a history of enriching shareholders is a healthcare company. united health group (UNH 0.50%). Based on total profits, including dividends paid, UnitedHealth Group has delivered profits to shareholders in 20 of the past 22 years.
Most people are familiar with UnitedHealth because it is the company’s health insurance division. Despite the Affordable Care Act taking away some of the premium pricing power from health insurance companies in the individual market, UnitedHealth has no problem operating within employer-based plans and the individual market. going.
The Optum subsidiary will provide an even greater growth driver for UnitedHealth. Optum provides numerous solutions for healthcare companies, including prescription refill services, care delivery, and software solutions. Not only is Optum growing faster than the health insurance sector, it often generates significantly more favorable operating margins.
6. Alibaba
Winners can also be found beyond the borders of the United States. Find the e-commerce giant alibaba (Baba 2.45%) Strengthening investors’ portfolios in 2024.
The most obvious catalyst for Alibaba is the steady return to normalcy of the Chinese economy. Chinese regulators abandoned their strict and controversial “zero-corona” mitigation strategy in December 2022. China’s once-dominant economy will take time to recover, but e-commerce still has a long way to go. Alibaba’s online shopping sites Taobao and Tmall account for about 51% of China’s e-commerce market, according to the International Trade Bureau.
In addition to being a leader in e-commerce, Alibaba is also clearly number one in cloud infrastructure services in China. Through March 2023, Alibaba Cloud accounted for 34% of the $7.7 billion spent on cloud infrastructure services in the first quarter. This fast-growing sector is still in its early stages of growth.
After unwinding Alibaba’s huge cash position, the company is trading at an all-time low of five times last year’s profits.
7. PayPal Holdings
Major fintech companies paypal holdings (PYPL -4.61%) Here is the 7th unrivaled stock that can make you rich in the new year. Increasing competition in digital payments and above-average inflation are weighing on stock prices, but incredibly cheap valuations could provide a significant boost for stocks.
Among PayPal’s many performance metrics, none are more important than user engagement statistics. Three years ago, the average active account completed 40.9 transactions on a 12-month (TTM) basis. As of the end of the third quarter (September 30, 2023), active accounts were approaching 57 transactions completed via his TTM. Since PayPal is primarily a fee-driven platform, increasing the total number of transactions is the easiest way to increase your gross profit.
We’re also seeing new CEO Alex Criss and the company’s board make deliberate tightening and shareholder-friendly moves. PayPal aims to reduce operating costs by $1.3 billion annually by 2023, and appears to be on track to buy back stock worth about $5 billion. A forward price/earnings ratio of 11x is not appropriate for a company capable of achieving his double-digit sales growth on a sustained basis.
8. Altria Group
Growth stocks seem to have been a feature this month. every As we head into the month of 2023, don’t overlook the power of proven value stocks in 2024. altria group (M.O. -0.43%)with a yield of nearly 10%, you could be even richer this year.
The biggest problem for tobacco stocks is that fewer adults are smoking cigarettes as consumers become more aware of the long-term risks of tobacco use. Thankfully, Altria, which operates the leading luxury cigarette brand Marlboro, has extraordinary pricing power for existing smokers. Even if cigarette shipments decline, Altria’s ability to raise prices could increase both sales and earnings per share.
Altria Group is also expanding into smokeless products. In June 2023, it closed a $2.75 billion deal to acquire electronic steam company NJOY Holdings. What makes NJOY so popular is that he has received six Marketing Clearance Orders (MGOs) from the U.S. Food and Drug Administration for his products. NJOY’s e-vapor products are allowed on retail store shelves; Huge The majority of electronic vapor products are not.
9. Pubmatic
Not all top stocks need to be household names. The one company with the catalyst you need to make you rich in 2024 is a lesser-known ad tech stock Pubmatic (PUBM -3.37%).
As we noted earlier, the advertising market endured a post-bear market downturn in 2022. The good news is that this recession should end with 2024 being an election year. Advertising agency GroupM expects U.S. political ad spending to reach $16 billion this year, 31% more than during the 2020 election cycle. As ad dollars shift to digital channels, companies like PubMatic that help publishers sell digital display space will benefit.
What is often overlooked about PubMatic is that the company chose to design and develop a cloud-based infrastructure rather than relying on third-party platforms. Although this was an expensive decision up front, it will allow the company to rapidly expand operating margins as revenues grow.
PubMatic has $171.4 million in cash, cash equivalents, and marketable securities, no debt, and is in good standing.
10. Visa
The last standout stock that can make you rich in 2024 is a payment processing specialist visa (V -0.34%). Despite certain dollar-based metrics sounding alarm bells for the U.S. economy and stock market, Visa has competitive advantages that could help it reach new highs this year.
Visa is a dominant force in domestic payments facilitation and has decades of opportunity in emerging markets. In 2021, it accounted for 52.6% of credit card network purchases in the United States (the largest consumer market). Additionally, the company can move its payments infrastructure organically or through acquisitions to the Middle East, Southeast Asia, and Africa over the next few years or decades and maintain double-digit growth rates.
Visa’s success is also due to its focus on payment processing. Visa has ceased to be a lender. That means they don’t have to deal with bad debts during a recession. Not having to set aside capital for credit delinquencies and loan losses during economic downturns is a distinct competitive advantage that allows the company to maintain its profit margins above 50%.
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