Last month, U.S. News put together a list of five stocks to buy for July. This month we’re doing the same, putting together a list of the five best stocks to buy for August.
If this month’s list is anything like last month’s, investors are in for big gains.
By month’s end, July’s five picks gained an average of 6.9 percent per pick, and not one of them ended the month down. The Standard & Poor’s 500 index, meanwhile, gained just 1.9 percent.
[See: 7 of the Best ETFs to Own in 2017.]
Since no one owns a crystal ball, there’s no way to guarantee a repeat performance, but without further ado, here are five of the best stocks to buy for August.
Facebook (ticker: FB). Mark Zuckerberg’s brainchild is unique in so many ways: It’s the world’s largest social media company with more than 2 billion users, it continues to grow at rates most small businesses would envy, and it’s the only back-to-back member of our monthly “best stocks to buy” list.
July was good to Facebook shares, which gained more than 12 percent as a stellar earnings report helped FB stock finish the month strong. It was the only FANG stock that didn’t lose ground in the last full week of July trading.
Not only does FB enter August coming off a strong second quarter, it’s still a stellar long-term business. With killer apps like WhatsApp, Instagram and Facebook Messenger all approaching or already in the billion-user club, Facebook is monetizing those more aggressively, and should be able to steadily squeeze more out of each user for years to come, just as Facebook itself does.
Plus, if virtual reality becomes as big as Zuckerberg sees it becoming, Oculus may well be ahead of the curve, and poised to dominate an insanely large industry.
Corning Incorporated (GLW). Corning, a New York-based glass manufacturer that’s one of America’s longest-living corporate success stories, sure isn’t growing like Facebook. But it’s a solid, consistent business, and investors can always use one of those in their portfolio.
One reason GLW looks like one of the best stocks to buy for August is the way shares behaved after its most recent earnings report. Despite second-quarter earnings and revenue that actually beat expectations, shares lost about 8 percent in the subsequent weeks.
Shares now trade at roughly 13 times earnings, lower than their 5-year average of 14.8, and pay a 2.2 percent dividend. A cheap, steady stock that rewards you with a cash flow, it’s no wonder Corning would be one of the best stocks to buy for August.
[See: 9 Ways to Invest in a Post-Election Market.]
GLW is more than just a short-term trade, too. It makes Gorilla Glass, which comprises the screen on the Apple ( AAPL) iPhone and iPad. And recently, Verizon Communications ( VZ) inked a three-year $1.05 billion purchase commitment for fiber optic cables, which Verizon’s using to build and improve its network.
DTE Energy Co. (DTE). In a stock market that seems to be ceaselessly trending higher without a worry in the world, it doesn’t hurt to own consistent performers with built-in demand. That’s why Corning makes sense, and that’s also why DTE Energy makes the list as a stock to buy.
DTE is an electric utility company. With a $19 billion market cap, a 3 percent dividend and just a 55 percent payout ratio, this looks like a fine stock to buy for investors looking for capital preservation and income instead of growth, growth, growth.
A recent bullish catalyst for DTE — and utilities stocks in general — is the Federal Reserve’s decision to stay further rate hikes in July. If the Fed gets less hawkish than it has been, slowing the pace of rate increases, utilities stocks should benefit, as they compete with Treasurys for investment dollars from risk-averse, yield-seeking investors.
The 10-year yield is currently only about 2.3 percent.
Amgen (AMGN). Biotechnology giant Amgen, though different in almost every way from DTE Energy, nonetheless makes this month’s list of stocks to buy. It’s important to note that, despite its $126 billion market cap and more than $22 billion in annual sales, AMGN is likely the most contrarian pick of August.
That’s because, despite its impressive second-quarter earnings report at the end of July — Amgen beat both revenue and earnings expectations — some market-watchers considered its outlook underwhelming, and the stock fell.
While analysts expect flat sales in 2017, earnings per share are expecting to increase about 8 percent, from $11.65 to $12.57. Trading at just 16 times earnings and 13 times forward earnings with a 2.6 percent dividend, Amgen’s downside risk is more limited than your average stock.
One near-term catalyst worth considering: its heart drug Repatha could become a blockbuster multibillion-dollar product, after sales of just $83 million last quarter. The FDA is considering whether to allow AMGN to include results of a recent clinical trial — showing reduced risks of heart attack, stroke and death — on Repatha’s label. The decision will come by Dec. 2.
United Technologies Corp. (UTX). Last but certainly not least: Dow Jones component and industrial giant United Technologies is a great long-term candidate for any investor’s portfolio.
The aerospace and defense behemoth is a clear beneficiary from increased military spending under a Republican-controlled White House and Congress. Perhaps the clearest message by the Trump administration’s first budget proposal was the prioritization of military and defense spending: a proposed $54 billion budget increase will do that.
UTX makes dozens of different engines, including those included in the F-22 Raptor and the F135 fighter jet. It also makes other essentials for aircraft, like landing gear, wheels and brakes, cockpit controls, air management systems, and a laundry list of other features and gizmos we take for granted.
[Read: The 10 Most Anticipated IPOs of 2017.]
With UTX using only 40 percent of its earnings to pay its 2.3 percent dividend, this income stock can keep flying higher for years to come — raising its payout all the while.
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5 of the Best Stocks to Buy for August 2017 originally appeared on usnews.com
