Some Stocks To Invest In Right Now

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With an average price-to-earnings (P/E) ratio of 45 for the S&P 500, stocks have become more expensive compared to the historical average of 16. At times like these, investors might want to keep an eye on value stocks like Phillip Morris. International (PM 2.09%) and Dollar General (DG 1.84%) trade at small price-to-earnings ratios relative to their earnings and growth potential.

Some Stocks To Invest In Right Now

Some Stocks To Invest In Right Now

At 15 times earnings, PMI stock is valued well below the market average, but higher than rivals Altria and Vector Group, which trade at 10 and 14 times earnings, respectively. PMI earns the premium because it focuses on lower-risk tobacco products, which insulates it from regulatory uncertainty.

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According to the “Wall Street Journal”, the Biden administration may force tobacco companies to reduce the nicotine content of cigarettes. The move could lead millions of smokers to quit or switch to less dangerous alternatives, such as PMI’s IQOS system – a heated tobacco system that delivers nicotine by heating rather than burning it.

But PMI doesn’t expect the government to “force” it to improve the safety of its products. The company currently sells its smoke-free products in 66 countries and plans to expand to 100 countries by 2025. In 2020, the FDA authorized IQOS as a modified risk tobacco product, paving the way for PMI’s U.S. partner Altria to commercialize the system in the U.S. and pay PMI a licensing fee.

Phillip Morris International expects 2021 revenue growth of 5% to 7% (about $30.4 billion at the midpoint). Smoke-free products accounted for 28% of revenue in the first quarter, and management expects that to increase to more than 50% by 2025. The stock also has a 4.9% dividend yield and has delivered 12 consecutive years of earnings growth.

Dollar General is a chain of discount stores that offers consumer, beauty, and other home goods. The stock is an excellent choice for value-conscious investors, as it trades at a relatively low forward price-to-earnings ratio of just 20 times, and its fundamental consumer business model helps it survive a challenging economic environment.

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Dollar General, like many grocery stores, has benefited greatly from the coronavirus pandemic, which has led to increased customer returns and increased basket sizes. This tailwind is likely to fade as the U.S. economy normalizes. But management believes that some positive changes in consumer behavior may become permanent. Dollar General has also been expanding its market share among younger, more digitally savvy consumers, which could increase adoption of its online ordering app.

Fourth-quarter revenue rose about 18% year-over-year to $8.4 billion, and operating profit rose 21% to $872 million.

Management expects fiscal 2021 revenue to fall 2% (to about $33 billion), which isn’t bad compared to last year’s pandemic-driven prices. Dollar General is also returning value to investors through its share repurchase program — repurchasing $2.5 billion worth of stock in 2020. In 2021, the board increased its mandate by $200 million, for a total of approximately $2.7 billion as of March. Dollar General pays a quarterly dividend, though it currently yields just 0.82%. With a dividend payout ratio of just 13.6%, Dollar General has plenty of room to pay for future dividend increases.

Some Stocks To Invest In Right Now

Expectations for value valuations tend to be lower, making them a great way to reduce risk in a market that is said to be overvalued. Phillip Morris International and Dollar General have the added advantage of operating in crisis-resistant industries and returning value to investors through large dividends and share repurchases.

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Will Ebiefung has no positions in any listed stocks. Motley has no positions in any listed stocks. Motley has a disclosure policy.

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That way, you can still deduct up to $15,300 from your 2022 taxable income. By investing $100,000 in these stocks in 2023, you could have $1 million in 2033. until 2023

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance and more with The Motley Fool’s premium service. Defensive stocks are those that perform better than the general market during a stock market downturn. While there’s no foolproof way to pick defensive stocks, these companies tend to share some common characteristics. Defensive stocks tend to be high quality, with strong balance sheets and solid returns. They also tend to have steady or growing dividend payments, which can provide steady income during tough times.

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Additionally, many defensive stocks are large, established companies, giving them some flexibility in the face of economic headwinds. While there’s no magic formula for picking the best defensive stocks, understanding these characteristics can help investors identify companies that are better positioned to hold up during market turmoil. Let’s take a look at these three defensive stocks that could be on our stock market watch list today.

First, The Kroger Companies (KR) is one of the oldest and largest grocery chains in the United States. The company is known for its wide selection of groceries and merchandise, as well as its comprehensive loyalty program. Kroger also offers several digital tools to make shopping easier, including an app that allows customers to shop online and pick up their items in-store.

Just last month, the Krgers announced they had reached a definitive agreement with Albertsons Companies. Specifically, Kroger will purchase all outstanding shares of Albertsons. Additionally, Albertsons Companies shareholders are expected to receive a total consideration of $34.10 per share. This equates to an estimated company value of nearly $24.6 billion. Additionally, the acquisition accelerates Kroger’s go-to-market strategy while positioning itself as a multi-channel grocery retailer.

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We unite two purpose-driven organizations to deliver exceptional value to customers, partners, communities and shareholders. Albertsons offers a complementary footprint and operates in multiple parts of the country, with few or no Kroger stores. This merger provides fresh, affordable food to more Americans by expanding our footprint into new geographies and strengthens our reputation as a larger and more attractive alternative to our larger and non-union competitors status, thereby advancing our commitment to a fairer and more sustainable food system.

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KR stock is up 6.35% so far this year, outperforming the broader market so far. Kroger stock closed in the green on Wednesday, rising 1.99% to $48.06 per share.

Second, we have Kimberly-Clark Corporation (KMB). Simply put, Kimberly-Clark is one of the world’s leading manufacturers of consumer goods. The company produces a wide range of products such as hand towels, toilet paper, diapers and feminine hygiene products. In addition, the company also owns a number of well-known brands such as facial tissue and Huggies.

At the end of last month, Kimberly-Clark announced its results for the third quarter of 2022. In the report, KMB reported third-quarter 2022 EPS of $1.40 on revenue of $5.1 billion. Alongside this, the company also confirmed its fiscal 2022 guidance. More specifically, the company said it still expects 2022 earnings per share of between $5.60 and $6.00, with revenue estimated between $19.83 billion and $20.22 billion.

Our third quarter results reflect the strong performance of our global teams in a challenging macro environment. We delivered organic sales growth across all segments and continued to deliver innovations that drive value for consumers.

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In the last trading month, Kimberly-Clark shares have recovered 12.41%. Meanwhile, shares of KMB fell 0.59% to $123.83 per share as of Wednesday’s close.

Topping the list is BJ’s Wholesale Club (BJ), a leading retail chain that offers members deep discounts on everything from groceries to electronics. BJ’s club model is similar to other wholesale clubs like Costco (NASDAQ: COST ) and Sam’s Club, but BJ’s offers its members even more perks through exclusive deals and coupons.

Late last month, BJ’s announced that it would release its third-quarter 2022 earnings before the market opens on Thursday, November 17, 2022. In the second quarter of 2022, BJ’s Wholesale Club performed better than expected. Specifically, in the second quarter of 2022, the company reported EPS of $1.06 on revenue of $5.1 billion.

Some Stocks To Invest In Right Now

Beyond that, BJ stock has gained 26.88% over the past 6 months of trading. Meanwhile, BJ’s stock closed up slightly 0.47% at $77.59 per share on Wednesday.

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