In this article, we take a look at 10 best stocks to buy for investment. If you want to see more best stocks to buy for investment, go directly to 5 Best Stocks to Buy for Investment.
While different people have different opinions on what the best stocks for investment are, a decent number of investors think the stocks of leading companies with substantial competitive advantages whose shares are generally less volatile could be good candidates.
Less volatile stocks generally don’t move as much as the broader stock market does because the future financial performance of less volatile stocks is arguably more predictable. There are certain times where less volatile stocks can be more volatile, however, such as during earnings.
Less volatile stocks include leading consumer staples whose demand doesn’t change all that much in more challenging economic times. Some less volatile stocks are conglomerates or have multiple leading brands. As a result of having multiple different businesses or multiple different brands, the overall company’s results might not change as much as the results of an individual business or individual brand do.
Many of the same leading stocks with generally lower betas also have fair growth prospects due to various reasons. For some companies, they might have decent growth potential in faster growing emerging markets such as India. For other companies, they might be repurchasing a lot of their stock. If a company buys back substantial shares and doesn’t issue any new shares, its EPS could grow even if its overall earnings stay the same.
Although they might have fairly predictable businesses, individual stocks might still underperform if a company makes a bad acquisition, for instance, or if its overall market demand isn’t as strong as expected. As a result, it could be a good idea for long term investors to have a well diversified portfolio of leading stocks across many different sectors.
In terms of 2023, many of the leading lower beta stocks have not rallied as much as the market has year to date. In some instances, the lower volatility stocks have declined year to date as individual company earnings have not be as strong as expected. Nevertheless, analysts do expect the leading consumer staples conglomerates mentioned in this article to grow in the long term.
New York Stock Exchange
Image: flickr.com
Methodology
For our list of 10 Best Stocks to Buy for Investment, we picked 10 stocks that have lower betas than the overall market and that have decent growth potential according to their EPS next 5 Year Ratio.
We ranked each of the 10 stocks based on their market capitalization as of 2/15.
For those of you interested, check out 10 Best Stocks to Buy for an 18 Year Old.
10 Best Stocks to Buy for Investment
10. The Clorox Company (NYSE:CLX)
Market Capitalization as of 2/15: $18.99 billion
EPS Growth Forecast Next 5 Years: 13.38%
Consumer staple The Clorox Company (NYSE:CLX) has a fairly high EPS growth forecast over the next 5 years of 13.38% because its trailing TTM EPS is relatively low. As a result of trailing twelve month EPS of $3.51, The Clorox Company (NYSE:CLX) has a P/E of 43.79 which is pretty high. Given analysts expect faster earnings over the next 5 years, The Clorox Company (NYSE:CLX) could eventually grow into its valuation and still be an attractive investment in the next 10 years. Shares are up 9.55% year to date and 7.54% in the last year.
Alongside The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT), and Johnson & Johnson (NYSE:JNJ), The Clorox Company (NYSE:CLX) is a low beta stock with decent EPS growth potential.
9. Church & Dwight Co., Inc. (NYSE:CHD)
Market Capitalization as of 2/15: $20.35 billion
EPS Growth Forecast Next 5 Years: 7.81%
Church & Dwight Co., Inc. (NYSE:CHD) is a consumer staple that owns well known brands such as Arm & Hammer. For full year 2022, the company’s net sales rose 3.6% year over year and its organic sales increased 1.4% year over year. Adjusted EPS was $2.97, a decline of 1.7% compared to 2021 adjusted EPS. Church & Dwight Co., Inc. (NYSE:CHD) shares are down 14.46% in the last year given the weaker results due in part to higher inflation. While Church & Dwight Co., Inc. (NYSE:CHD)’s earnings didn’t increase in 2022, analysts expect the company to earn $3.07 per share in 2023, $3.33 per share in 2024, and $3.60 per share in 2025.
8. Kimberly-Clark Corporation (NYSE:KMB)
Market Capitalization as of 2/15: $43.12 billion
EPS Growth Forecast Next 5 Years: 9.49%
Kimberly-Clark Corporation (NYSE:KMB) is a leading personal care corporation that makes paper based consumer products. In terms of its portfolio, Kimberly-Clark Corporation (NYSE:KMB) has five billion dollar brands that are sold in over 175 countries. In terms of its 2021, developing and emerging markets accounted for 30% of its net sales.
When it comes to organic sales growth, the company has averaged around 3% growth from 2019 to 2021. For 2022, Kimberly-Clark Corporation (NYSE:KMB)’s full year adjusted EPS declined 9% year over year to $5.63. In terms of outlook, the company expects net sales in 2023 to increase 0 to 2 percent including organic sales growth of 2 to 4 percent.
7. Colgate-Palmolive Company (NYSE:CL)
Market Capitalization as of 2/15: $60.72 billion
EPS Growth Forecast Next 5 Years: 6.02%
Colgate-Palmolive Company (NYSE:CL) is a leading consumer products company that makes toothpaste, mouthwashes, and more. In terms of the next 5 years, analysts expect Colgate-Palmolive Company (NYSE:CL) to grow its annual EPS on average by 6.02%. Specifically, analysts expect the company’s EPS to increase from $2.97 in 2022 to $3.11 in 2023, $3.40 in 2024, and $3.70 in 2025. Colgate-Palmolive Company (NYSE:CL) shares have a dividend yield of 2.59% as of 2/15.
6. Unilever PLC (NYSE:UL)
Market Capitalization as of 2/15: $130.31 billion
EPS Growth Forecast Next 5 Years: 6.9%
Unilever PLC (NYSE:UL) is a leading household and personal products company whose underlying sales rose 9% in 2022. For the year, the company’s underlying earnings per share decreased 2.1% year over year, however, to €2.57. During 2022, the company bought back €1.5 billion worth of shares and also paid €4.3 billion in dividends. For 2022, Unilever PLC (NYSE:UL) added, “Unilever delivered a year of strong topline growth in challenging macroeconomic conditions. Underlying sales growth was 9.0%, driven by disciplined pricing action in response to high input cost inflation. Growth was broadbased across each of our five Business Groups, led by strong performances from our billion+ Euro brands. Despite sharp rises in material costs, we have prioritised stepping up our brand and marketing investment. Underlying operating margin was delivered in line with our guidance, with underlying operating profit up for the year.”
Unilever PLC (NYSE:UL) shares are up 2.44% year to date and have a dividend yield of 3.49% as of February 15.
Like Unilever PLC (NYSE:UL), The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT), and Johnson & Johnson (NYSE:JNJ) are low beta stocks with decent EPS growth potential.
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Disclosure: None. 10 Best Stocks to Buy for Investment is originally published on Insider Monkey.