Stocks that keep giving.
Ho, ho, buy-and-hold! Have a holly, jolly profit! Here come dividends, big fat dividends, right down Dividend Lane! There’s booty in Santa’s bag just for you, courtesy of Wall Street. Trouble is: The chubby guy in the red suit can’t help you make any proactive picks to plump the portfolio. But we have allies better than elves: experts. And they’ve got recommendations to make Black Friday blowouts look like child’s play. For long after those new smartphones have died, and the spice racks get re-gifted (and returned) on the sly, these stocks could keep giving and giving and giving. Here’s a roundup of seven best stocks to buy for the holidays.
Estee Lauder Companies (ticker: EL)
After a flat 2018, Estee Lauder has shot up this last month by 15 percent and now trades at $144. This follows the most recent quarter where net sales grew 8 percent year-over-year. “There’s strong expected dividend growth over the next 12 months and lots of free cash flow to support future growth,” says Kian Salehizadeh, senior analyst at Blockforce Capital in San Diego. What’s more, Salehizadeh says EL continues to find innovative ways to stay relevant with millennials.
Nvidia Corp. (NVDA)
This computer gaming company, which designs graphics processing units, had a brutal October, diving more than a third due to tech sector corrections. The latest earnings reports only made things worse, the stock dropping another 18 percent. But can you say screaming bargain? Fifteen of 22 analysts call Nvidia a “strong buy.” Salehizadeh says: “As long as gaming, AI, and crypto sectors continue to shine, Nvidia will be a top pick.” Its five-year annualized dividend growth rate is 15 percent.
General Motors Co. (GM)
When Warren Buffett talks, investors listen: He just upped his GM stake by roughly 3 percent. “I’m bullish on GM stock,” says Bob Johnson, a finance professor at Creighton University’s Heider College of Business. “It’s a value stock, very attractively priced at 6.2 times forward earnings, with a robust dividend yield of 4.16 percent.” Though shares have skidded 18 percent over the last year, Johnson says the price-earnings ratio shows much promise: just 0.34, compared to 3.25 for Tesla (TSLA).
Cracker Barrel Old Country Store (CBRL)
Be sure to ask the sales clerk for some shares to go with those tchotchkes. “This store-within-a-restaurant concept generates one of the best revenue-per-square-foot metrics in the industry,” says Christopher Ma, director of the George Investments Institute at Stetson University in DeLand, Florida. At $170 per share, CRBL is up 15 percent since Oct. 1. “It’s a solid dividend payer starting a nice trend in issuing special dividends.” The yield stands at more than 5 percent, $1.25 per share quarterly.
The words “market correction” and “$1,450 per share” rarely get uttered together, but Amazon has become that kind of e-commerce gorilla. After peaking at $2,050 in August, “It smelled like a market-top type of event and I tweeted about it,” says David Banister, chief strategist of Stockreversalspremium.com and member of the StockTwits community. “We want to see Amazon hold the $1,450 area as a normal correction,” and yet the stock is $1,500 and up 33 percent year-over-year.
Lululemon Athletica (LULU)
Its sport bags say, “Friends are more important than money,” but happy investors may beg to differ. The female-centric Canadian athletic apparel-leisure company hasn’t renewed its dividend recently but that could change thanks to robust North American growth. “Lululemon has taken the retail industry by storm,” says Tyler Hay, CEO of Bellevue, Washington-based Evergreen Gavekal. “Once considered a passing fad, LULU seems here to stay with top-line revenue growth projected at 20 percent-plus over the next five years.”
Ares Capital Corp. (ARCC)
Public since 2004, this business development company “has paid out $20.21 per share in dividends,” Ma says. “Because of conservative management, ARCC quickly recovered after the 2008-’09 crash.” With a 90 percent floating-rate loan portfolio, “ARCC stands to benefit from rising interest rates. It recently increased its dividend by 2.6 percent and a special dividend is likely to come soon.” AARC boasts a 9.1 percent yield, “and this is a great opportunity to join insiders and buy this blue-chip company,” he says.
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