The average consumer will spend $1,000 this holiday season. Don't be average, consider making your money work for you with these stocks.
The holiday shopping season is upon us, and it’s a big one. The National Retail Federation predicts that the average shopper will spend just over $1,000 between Thanksgiving and Christmas on gifts, decor and other miscellaneous purchases. But what if those dollars went toward building wealth instead? Here’s a look at four stocks to buy this Cyber Monday to make your money work for you.
Instead of buying the heavily discounted air pods everyone is raving about, consumers might want to consider picking up AAPL stock instead. Apple’s track record of success is an impressive one, making it one of the best stocks to buy for long-term investors. From the iPod to iPhones to the Apple Watch, the firm has proven that it knows what consumers want.
Apple stock trades for just under $270 per share. The firm’s P/E of 22 isn’t cheap but considering its potential growth ahead looks reasonable. With 5G on the horizon, an iPhone upgrade cycle is likely to follow. On top of that, Apple recently launched a new streaming platform to go along with its other subscription services. In the future, Apple could eventually bundle its hardware and software services into a subscription model, thus creating a more predictable revenue stream that won’t depend as heavily on upgrade cycles.
Beyond that, AAPL has historically been shareholder-friendly with buyback programs and a reliable dividend. Right now Apple stock offers a dividend yield of 1.15%, a figure that’s likely to rise as the firm continues to thrive.
Next on the list of stocks to buy this Cyber Monday is Tanger Factory Outlets, a REIT that invests in the shopping centers that Black Friday shoppers stormed over the weekend. Of course, investing in brick-and-mortar retail is inherently risky, but SKT’s portfolio and history of weathering the storm makes it a worthwhile investment.
SKT’s portfolio consists mostly of outlet malls, a segment that has been relatively insulated from the impact of the retail apocalypse. Tanger saw foot traffic rise by 1.5% in 2019, evidence that people still want to visit outlet stores in-person. Plus, Tanger’s outlet malls consistently have occupancy rates above 90%, suggesting there’s strong demand for the stores. That’s because retailers use outlets to move unsold inventory and make way for new goods.
The biggest reason to own SKT is its 9.33% dividend yield— something investors won’t find elsewhere in the industry. At just $15 per share, investors can pick up 13 for just under $200.
If there’s one industry investors can count on, it’s defense. The government is unlikely to cut its defense budget, especially if Trump remains in office. That’s why defense stocks like LMT make for great stocks to buy and hold.
A big part of the reason to love LMT is the fact that the firm has been raising its dividend every year since 2002. Today, LMT offers a 2.46% dividend yield, but investors can count on that figure increasing in the years to come. Over the past 10 year’s, LMT’s yearly dividend growth rate is over 16%.
LMT derives more than half of its revenue from US government contracts, and the firm’s backlog of future business totals more than $130 billion. While there’s some concern that the upcoming election could see a new party in power and thus lower defense spending, LMT looks like a great long-term play at $391 per share.
JNJ stock has become a controversial investment over the past few years as investors wonder whether the firm’s heyday at the top of the healthcare food chain is over. The firm has been under the microscope recently as lawsuits involving its baby powder and its involvement in the opioid crisis have hurt its image.
But this isn’t the first time JNJ has dealt with consumer concern regarding its products, and it likely won’t be the last. If anything, the perceived weakness opens the door for a buying opportunity,.
Another issue plaguing JNJ stock right now is the loss of some of its patents. In 2023 the patent for JNJ’s drug Stelara will expire and open the door for competition. That’s concerning because the drug brings in about 6% of the firm’s revenue.
Again, it’s worth considering, but JNJ’s massively diversified business is well-equipped to deal with these changes. Johnson & Johnson is a great example of a value stock to buy and hold onto because its recent weakness has created a great buying opportunity at just under $140 per share.
As of this writing, Laura Hoy was long AAPL.
Disclaimer: The above should not be considered trading advice from CCN.
This article was edited by Gerelyn Terzo.
Last modified: December 1, 2019 2:21 PM UTC