Ever since the economic slowdown in the last few months of 2022, many have begun to wonder about the best US stocks to buy now. For instance, once highly-priced tech shares are available at a heavily discounted rate. Can't a long-term investor secure a high-quality stock for a bargain price?
Before proceeding, it is essential to clarify that the cluster of the best US stocks will differ from investor to investor. These options will vary depending on your investment approach, experience, and risk parameters.
With rising inflation rates and the foreboding fear of recession, is it the right time to invest in the stock market? Well, that depends on your risk appetite and investment strategy.
Managing an economic downslide can be difficult if you are an investor with a short-term goal. But, if you’ve invested with a long-term horizon, you might profit from the current market changes. Remember, the stock market is about the long-term game - especially given the present economic scenario.
Heads up! Due to market volatility, consider all 'Best US stocks to buy' lists with a grain of salt. When market conditions change, the value of these stocks may also vary. Thus, the list below represents the best US stocks to buy, per the market conditions on NASDAQ during the last few months of 2022.
While throughout 2022, tech stocks were strapped for growth due to rising inflation and interest rates, Alphabet stands out as a must-buy, given its cash flow reserves. As per Q3 reports, Alphabet recorded a free cash flow reserve of $16.08 Billion.
It signals that the company is well-poised to weather a possible economic turndown. As one of the strongest companies with a global presence, Alphabet shows tremendous earnings potential, especially for long-term investors.
With Q3 revenue figures increasing 15% to hit the $127.1 Billion mark, Amazon performed remarkably well given pre-given estimates of $127.5 Billion. Despite a decent revenue record, Amazon's share prices have declined, with investors rapidly selling their holdings.
However, this can be interpreted as a consequence of the inflationary pressures, narrowing margins and budgeted customer spending — rather than the company's performance. With the growth potential of AWS, Amazon can be treated as one of the best US stocks to buy now. Investors can treat this as an opportunity to buy a profitable stock at a discounted price.
It is the best US stock to buy now for someone looking for a stock option that matches both long-term growth objectives and short-term security goals. The company's stock has weathered quite a storm over the last few years, with the safety of its best-selling airliner coming into question, supply chain disruptions, and the COVID-19 outbreak.
However, the company did generate $3 Billion in free cash flow in the last quarter and has announced plans to generate $10 Billion in free cash flow by 2025-26. This, coupled with a massive new contract for Boeing 737 MAX planes, the company is poised to do well.
While the tech industry is reeling with cutbacks and lay-offs, spending on cybersecurity services, like the ones provided by Palo Alto Networks, continues in full swing. After several quarters of solid sales, forecasts suggest a 25% increase in revenues, more substantial cash flows, and improved margins with the introduction of new-age cybersecurity measures. The Palo Alto stock is a promising defence option if the economy is heading towards a downswing.
With net monthly sales growing from 5.7% to 10.1% year-on-year, Costco's domestic and international expansion plans are in full swing — thanks to a loyal customer base.
As inflation rates plague the global economy, customers will likely become more budget-conscious and turn to cost-effective discount retailers like Costco. Additionally, with the company planning a hike in membership rates, the profitability of the stock is set to rise in the long term.
While the other companies on the list are well-known market players, Medifast is a relatively much smaller venture with a market capitalisation of $1.35 Billion. The weight-loss brand has reported one of the highest dividend yields of 5.54% for the last quarter.
As per earning estimates, the company is well-poised to sustain or increase its dividend payout next year. Additionally, the forward price-to-earnings ratio of 8.85 signals the possibility of Medifast being one of the best-value US stocks.
The UGI Corp stock is yet another excellent dividend stock to endure the heightened risks of a bearish market. The regulated natural gas and propane distributor has raised dividend payments for the last 35 years.
It means that the company has weathered major economic crises like the dot-com bubble pop, the '08 recession and the pandemic-induced slowdown quite admirably — churning out regular dividends for its investors. Per its current growth metrics, the company is expected to offset its stock price fall and continue paying high dividends to investors.
Next on our list of the best US stocks to buy now is Johnson & Johnson. The J&J stock has reported strong financials in the last 12 months, with a profit of $18.4 Billion against a revenue of $95.6 Billion and a free cash flow of a little less than $20 Billion.
The company plans to spin off its customer-health business, focusing on potential growth areas like medical devices and pharmaceuticals.
With inflation rates skyrocketing and rising oil prices, it's not surprising that Exxon Mobil stock is one of the best US stocks to buy now. As the leading name in the oil and gas sector, Exxon Mobil has made significant gains since the beginning of the year.
The cash flow built by the company was used to expand its refinery and shale deposits endeavours, creating another revenue chain. While gas prices are trailing below $4, once they cross this threshold - given the rising inflation levels - Exxon stock may seem profitable.
As another formidable stock in the energy sector, EOG Resources has benefited from the rising crude oil and natural gas prices. With an annual dividend yield of 2.35%, EOG is an excellent addition to your portfolio, especially as oil prices are expected to rise in the coming months.
Risk appetite, market conditions and investment goals are essential guiding factors before considering the best US stocks to buy now. Fi enables you to invest in top US companies — at industry-best forex rates. So you can own shares in Apple, Tesla, Microsoft, and so on! Besides in-app explainers, novice investors can use Curated Collections (like All-Time Favourites) to make decisions. Seasoned investors can dive deeper, apply many filters (like Stock Price) & pick from a wide range of international options. What's more, on Fi, you can buy US Stocks instantly with zero brokerage fees.
If you’re starting your investment journey, putting your money in tried and tested large-cap blue-chip holdings makes the most sense. As of December 2022, stocks like Apple Inc, Microsoft Corp, Alphabet and Costco Wholesale Corporation are good options.
Broadcom Inc, Apple Inc and Costco Wholesale Corp stocks are some of the best long-term options. All these stocks show sustained growth in forward ESP estimates (Earnings Per Share), provide ample liquidity and have outperformed S&P 500 in the last half-decade.
Growth stocks are exceptional options for those with a moderate risk appetite and long-term investment horizon. Regarding revenue growth, earnings, cash flows, dividends and book value, Catalyst Pharmaceutical Inc. is the fastest-growing stock in the US market.
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