One of the most chaotic years in decades is finally winding down — but investors aren’t out of the woods yet, and there’s still an incredible amount of uncertainty packed into the final two months of 2020.
In November, Wall Street’s obsessive focus on the prospects for another stimulus package will remain front and center, but the digestion of third-quarter earnings, the result of U.S. elections and the continued global course of the pandemic each loom as obvious catalysts that investors will need to rapidly factor in.
Here are five of the best stocks to buy for November:
— ViacomCBS (ticker: VIAC)
— NextEra Energy (NEE)
— Facebook (FB)
— Berkshire Hathaway (BRK.A, BRK.B)
— PayPal Holdings (PYPL)
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ViacomCBS (VIAC)
Media and entertainment giant ViacomCBS might not be the sexiest stock on this list — its shares are down 31% in 2020. But it’s a long-term value play with staying power, making it an attractive stock to buy for November and beyond.
Income investors will find something to like in VIAC’s 3.3% dividend yield and its conservative 21% payout ratio. The media conglomerate owns CBS, Comedy Central, Showtime, MTV, BET and Nickelodeon, among other valuable global brands. When the pandemic first hit, investors worried the sudden termination of live sports would decimate ViacomCBS, but those fears quickly proved to be overdone, and Viacom has already secured rights to carry some NFL playoff games in January.
Barclays recently upgraded the stock from “equal weight” to “overweight,” boosting the price target for VIAC stock from $22 to $36. The NFL negotiations, a more stable cash flow environment and improving streaming revenue were cited as catalysts.
The company reports earnings on Nov. 6.
NextEra Energy (NEE)
Electric utility NextEra Energy purports to be the world’s largest producer of wind and solar energy, and it’s unquestionably one of the leading renewable energy companies in the U.S. Utilities stocks are often safe havens in times of turmoil, which is part of what makes NEE an attractive stock to buy for a potentially tumultuous November.
Some investors might find a certain speculative appeal to NEE as well; should former Vice President Joe Biden be elected, NextEra Energy could be in a position to receive tax credits, subsidies or other favorable incentives aimed to encourage its investments in renewable energy.
Although NEE promises to offer steady growth going forward and pays a 1.9% dividend, investors have been bidding the stock up this year; it currently trades for 38 times earnings, is up about 25% in 2020 and underwent a 4-for-1 stock split effective Oct. 27.
Facebook (FB)
Named one of U.S. News’ Best Stocks to Buy for 2020, Facebook may not be among the favorite picks of environmental, social and governance investors, but its potential as a long-term holding for investors is impossible to ignore.
Along with Alphabet’s ( GOOG, GOOGL) Google, Facebook and its family of apps dominate the digital advertising market. With Google now at the center of the largest Big Tech antitrust lawsuit since Microsoft ( MSFT) two decades ago, Facebook could find itself with more strength in an already oligopolistic market.
Although it trades for 36 times earnings and is worth around $800 billion, that valuation is by no means unreasonable for a company in Facebook’s position with no long-term debt, more than 3.1 billion monthly active people using its services and earnings growth over the next five years expected to be around 20% annually.
Berkshire Hathaway (BRK.A, BRK.B)
Markets are cyclical. What’s in favor today won’t be in vogue forever, and what’s out of favor today will once again return to prominence. Berkshire CEO Warren Buffett is the world’s most famous and most successful living value investor, a strategy currently suffering its worst run relative to growth stocks in about 200 years, according to recent reporting from the Financial Times.
Shares of Berkshire Hathaway, which is heavy on insurance companies, banks, and old economy businesses like railways and utilities, are down about 8% year to date as tech stocks have dominated Wall Street.
That’s perfectly fine for the patient and conservative long-term investors, who should view Berkshire Hathaway shares as a way to insulate their portfolio from extreme volatility — and put some money with the greatest investor of all time. At the end of last quarter, Berkshire had more than $146 billion in cash on hand available to make opportunistic deals with.
PayPal Holdings (PYPL)
Last among the best stocks to buy for November is digital payments giant PayPal, which stands in sharp contrast to value stocks like Berkshire. PYPL is an all-out growth stock, with shares up more than 85% in 2020 as the sudden, dramatic shift to e-commerce and mobile transactions has accelerated the pivot to a more cashless society.
PayPal, which owns the popular mobile payment platform Venmo, recently announced it would be allowing customers to trade cryptocurrencies — and not merely trade them, but make purchases with cryptocurrency through its app.
That move only boosts the opportunity for user growth, which is already impressive. Last quarter, PayPal set a record for net new accounts (21.3 million) and posted an 86% increase in quarterly profit.
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5 of the Best Stocks to Buy for November originally appeared on usnews.com
