London, England, 2 June 2021, ZEXPRWIRE, As an investor in 2020 will agree, the stock market is constantly full of surprises. However, the most critical aspect analysts evaluate when determining the best stocks to purchase in 2021 is the same reason that ruled in 2020: Covid-19.
Companies that profited from new and faster trends due to COVID-related lockdowns were often among the best stocks in 2020. However, a “return to normalcy” and a recovering economy are predicted to help several top stocks for 2021.
In its 2021 estimate, LPL Financial, a retail investment advising business, notes, “Continued success in response to COVID-19, including extra stimulus, will be the key to sustaining the recovery.”With profits rebounding in 2020 and significant earnings growth in 2021, equities may be able to reach even greater levels.” During the pandemic, implemented cost-cutting measures, and they may maintain them.”
So, here are some top stocks to purchase in 2021, according to Carter-William’s Broker. A handful of these stocks have been bulldozers for a long time and appear to be on track to do so again this year. Many more of these stocks are apparent “recovery” bets that took a beating in 2020 but are predicted to rebound in 2021.
● Philip Morris International (PMI)
PMI stock is priced at 15 times earnings, which is lower than the market average but more than rivals Altria and Vector Group, valued at 10- and 14-times earnings, respectively. Moreover, PMI is deserving of its premium due to its concentration on low-risk tobacco products, which may protect it from regulatory uncertainty.
According to the Wall Street Journal, the Biden administration may force tobacco firms to reduce nicotine levels in cigarettes. It might push millions of smokers to quit or switch to safer alternatives like PMI’s IQOS, a heated tobacco device that releases nicotine by heating rather than burning.
On the other hand, PMI will not wait for the government to “force” it to make its goods safer. Currently, the firm sells its smoke-free goods in 66 countries to expand to 100 by 2025. In addition, the FDA approved IQOS as a modified risk tobacco product in 2020, allowing PMI’s U.S. partner, Altria, to sell the system in the United States and pay PMI license payments.
In 2021, Phillip Morris International anticipates sales growth of 5% to 7% (approximately $30.4 billion at the midpoint). Smoke-free items accounted for 28% of sales in the first quarter, and management anticipates that figure to rise to over 50% by 2025. The company also boasts a 4.9 percent dividend yield and has increased its distribution for the past 12 years.
● Dollar General (DG)
Dollar General is a discount retail shop chain that sells consumables, cosmetic supplies, and other home necessities. Because of its comparatively low forward P/E multiple of 20 and consumer staple business model, the company is a fantastic bargain buy for value-conscious investors.
Like many other grocery shops, Dollar General benefitted greatly from the coronavirus outbreak, which resulted in more consumer return trips and more significant basket sizes. As the U.S. economy normalizes, this advantage will certainly fade. However, management feels that some of the favorable improvements in customer behavior will last. Dollar General has also increased its market share among younger, more tech-savvy customers, who might help the company’s online ordering app take root.
Net sales jumped 18 percent year over year to $8.4 billion in the fourth quarter, while operating profit jumped 21% to $872 million.
In the fiscal year 2021, management forecasts net sales to fall 2% (to roughly $33 billion), which isn’t awful compared to last year’s pandemic-boosted comparisons. Dollar General’s share buyback program, which will repurchase $2.5 billion in shares in 2020, likewise delivers value to investors. The board expanded the authorization by $200 million in 2021, bringing the total to $2.7 billion as of March. Dollar General does pay a quarterly dividend, but it barely yields 0.82 percent right now. Moreover, Dollar General has lots of room to support dividend hikes in the future, with a dividend payout ratio of only 13.6 percent.
● Aspen Technology (AZPN)
Aspen Technology is a software firm that specializes in the automation of processes. For example, consider software for power plants, refineries, and chemical facilities to enhance productivity and reduce emissions. This is especially true today, as companies attempt to reduce carbon emissions while still meeting financial, social, and governance (ESG) objectives.
Due to poor weather in Texas, which led some power and energy firms to postpone purchase decisions, Aspen missed earnings in the first quarter. As a result, Aspen’s shares dropped 13% after the poor results. However, it claimed that this was an overreaction, and that shares should be valued at $145 – higher than market rates – and that the company’s recent issues are merely “transitory” rather than indicative of a downturn in its overall performance.
To Sum it Up…
Value stocks have fewer expectations built into their values, making them an excellent method to mitigate risk in an inflated market. Phillip Morris International and Dollar General also have the advantage of operating in crisis-resistant businesses and returning wealth to shareholders through significant dividend payments and stock repurchases.
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Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
Source: Carter-Williams Broker
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