Last year was great for Wall Street in general, and for most individual investors who had their money in the market. This year is proving to be a bit more turbulent. As the first quarter comes to a close, here’s a look at five of the best stocks to buy for April.
Trade tensions, political uncertainty surrounding President Donald Trump, Russia and the president’s alleged mistresses, as well as the real impact of the tax cuts are laying the groundwork for a tumultuous 2018 in the financial markets.
[See: 7 of the Best Dividend Stocks to Buy for 2018.]
Each month, U.S. News names a handful of stocks poised to outperform, both over the next month or so and in the medium to long term. April’s stock picks contain a number of conservative dividend names as well as a few timely momentum stocks.
Overall, it’s a portfolio designed to do well regardless of what the month ahead brings.
Fifth Third Bancorp (Nasdaq: FITB)
Fifth Third Bancorp is a $23 billion Cincinnati-based regional bank that’s cheap, growing and income-producing — all qualities that make it one of the best stocks to buy for April.
At a price-earnings multiple of 12, Fifth Third was founded in 1858, and has managed to survive every banking crisis and recession over the last 160 years. It pays a 2.1 percent dividend, which isn’t bad, and boasts a payout ratio of just 20 percent, which means FITB needs to use just one-fifth of its profits to pay shareholders dividends.
On the regulatory side, a bill rolling back part of Dodd-Frank was recently passed in the Senate, a decision that will directly impact Fifth Third Bancorp and its investors should it eventually make its way through the House. Upon signing, the bill will be good in the short and medium term for FITB shareholders, as it would ease the regulations on banks with assets less than $250 billion, a number currently at $50 billion.
Twitter Inc (TWTR)
After Facebook’s ( FB) complete market meltdown in March — shares entered bear market territory, down 20 percent from their peak — its closest rival, Twitter, stands to gain.
Twitter is particularly poised to gain from Facebook’s Cambridge Analytica fiasco, as advertisers and users aren’t the only ones that may shift from FB to TWTR. Institutional investors — especially those who sold FB in disgust over the scandal — are likely looking to Twitter shares for social media exposure.
Qualitatively, Trump’s obsessive use of the service gives Twitter a lot of PR and helps to bring new users onboard as well, and quantitatively, the company is turning a corner, too. In its most recent quarter, TWTR showed revenue growth for the first time in a year and impressive profits to boot.
While attractive for different reasons than FITB, Twitter is also one of the best stocks to buy for April.
Ally Financial Inc (ALLY)
Here again, we’ve got another mid-cap financial stock among five of U.S. News’ stock picks for the next month. Why?
Well, Ally also happens to be a cheap, dividend-paying stock, and despite the fact that the Federal Reserve still isn’t raising interest rates rapidly, it is raising rates, and that’s good news for financials. Retail banks like Ally make their bones on the difference between what they pay for deposits and what they charge for loans, and that spread benefits when rates are on the up-and-up.
[See: 10 of the Best Cheap Stocks to Buy Under $10.]
As far as the dividend is concerned, Ally is almost identical to FITB, yielding 2 percent and paying out just 20 percent of its earnings to do so, which leaves plenty of room for improvement.
Shares trade for 11.6 times earnings, less than 8 times forward earnings, and under 0.9 times book value.
Intel Corporation (INTC)
Turning to the semiconductor industry, INTC is a nice mix of both growth and value. Currently, it has momentum, with shares trading above three important technical bounds — the 20-day simple moving average (SMA), the 50-day SMA and the 200-day SMA.
And despite trading at less than 17 times earnings — for context, the Standard & Poor’s 500 index goes for 25 times earnings — shares have still risen a remarkable 50 percent in the last year.
Investors should be warned that part of INTC’s rapid rise over the last year is due to speculation; the chip company made waves in November when it poached AMD’s ( AMD) head of graphics, a move signaling Intel’s shift into graphic processing units (GPUs), a high-growth area led by Nvidia Corp. ( NVDA) and AMD.
Still, every running stock needs a story, and that story is one reason INTC is one of April’s best stocks to buy.
Momo Inc (ADR) (MOMO)
Last but not least is MOMO, giving this list a pure growth name to go along with its handful of value and dividend plays.
This company is a mid-cap Chinese social networking and video company that’s seen enormous growth since its foundation in 2011. Momo is built around mobile, and the concept that users will build their networks around location and interests.
While revenue growth is inevitably slowing as time goes on, sales are still quite impressive, growing by 57 percent last quarter, and over the last 5 years earnings have more than doubled annually.
[See: 7 of the Best Bank Stocks to Buy for 2018.]
For such extreme growth, MOMO trades at an attractive valuation, going for just 25 times earnings; analysts expect EPS to rise 30 percent this year on 37 percent revenue growth.
More from U.S. News
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7 of the Best Blue-Chip Stocks to Buy for 2018
5 of the Best Stocks to Buy for April originally appeared on usnews.com
