The stock market has really stumbled out of the gates to start 2022. Between surging inflation, soaring oil prices and the war in Ukraine, there is uncertainty as far as the eye can see. Throw in the Federal Reserve’s likelihood to hike interest rates many times over the next 18 months, and investors have quite the challenge ahead of themselves.
It’s not all bad news, though.
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The market correction has created a great deal of opportunity in certain stocks and sectors. It’s not just software and tech stocks, either. Big discounts are showing up in many sectors of the economy. Here are five of the best stocks to buy for March:
— Sherwin-Williams Co. (ticker: SHW)
— Ecolab Inc. (ECL)
— Intuit Inc. (INTU)
— Domino’s Pizza Inc. (DPZ)
— Vail Resorts Inc. (MTN)
Sherwin-Williams Co. (SHW)
There’s big money in the paint aisle. Sherwin-Williams shares have quintupled over the past decade as the maker of paints, stains and coatings has enjoyed tremendous success growing its brand and market share. A rise in the housing market has helped things along, as well, as people are putting more money into home remodeling and repairs. Sherwin-Williams has been a particularly big beneficiary there, since its business is closely connected to professional painters and contractors.
That said, the home repair business has hit a bit of a bump. Home Depot Inc. (HD) stock plunged following its recent earnings report, and that’s caused other industry players to sell off. In the case of Sherwin-Williams, it has fallen 23% year to date. That pushes the company’s valuation down to just 23 times forward earnings.
Ecolab Inc. (ECL)
Ecolab is far and away the largest company in the hygiene, food safety, water treatment and sanitation space. The company provides all sorts of cleaning and hygienic services across numerous industries such as hospitality, manufacturing, power, utilities and food service. Ecolab shares have been incredibly consistent long-term performers, with the stock regularly hitting new all-time highs. That’s not surprising, as the company has grown earnings and free cash flow at a mid-teens percentage rate over the years.
Ecolab enjoys both organic growth and a large mergers-and-acquisitions platform, as it still controls less than 10% of the total addressable market. Given the large number of smaller players in the industry, Ecolab should be able to keep growing for many years to come. Meanwhile, shares have pulled back nearly 30% to start the year, giving traders a solid entry point.
[SEE: 9 Highest Dividend-Paying Stocks in the S&P 500]
Intuit Inc. (INTU)
It’s tax season once again. And that means that traders are putting Intuit back on their radars. The maker of TurboTax and other financial software has sold off sharply this year as part of the broader exodus out of all things software-related. Intuit has several things going for it compared to other software names. For one, it’s already strongly profitable and sells at 35 times forward earnings, which isn’t too pricey among software stocks.
Intuit is also more than just tax software. It has made recent acquisitions of other things such as Credit Karma that give Intuit a more robust platform across fintech. In time, TurboTax and QuickBooks will be just part of Intuit’s broader personal finance and accounting toolkit. As it adds these high-margin ancillary services to its lineup, Intuit should enjoy rising profitability and cash flow generation.
Domino’s Pizza Inc. (DPZ)
Domino’s Pizza shares have pulled back more than 25% to start 2022. That could give investors a good entry point to buy the often expensive stock. Even after its latest correction, shares are still going for 28 times forward earnings, which isn’t generally a bargain for a restaurant stock. However, there is evidence to suggest that Domino’s is worth the price tag. The company has managed jaw-dropping growth over the past decade. Additionally, management’s willingness to lever up the balance sheet and buy back stock has added a ton of shareholder value.
Analysts may see a bit of a slowdown for Domino’s as the stay-at-home tail winds fade and cost inflation takes it toll on the pizza business. However, Domino’s should still do fine despite the short-term choppiness. And some of the rising demand from pandemic-driven ordering may stick as people become more accustomed to ordering delivery from the Domino’s app.
Vail Resorts Inc. (MTN)
Vail Resorts is the leading owner of ski resorts in North America. It owns Vail, Park City, Breckenridge and Whistler-Blackcomb, among other famous destinations. Vail was a big winner in the reopening trade; as people wanted to get out and about again, places like ski resorts saw a surge in demand. However, so-so weather and soaring gas prices, among other concerns, are leading to jitters around operating results going forward. Arguably, however, this is more than priced into Vail’s stock already, as shares are down by a third from their 52-week highs.
Shares are now selling at just 25 times forward earnings. And in the longer run, consumer demand for experiences such as skiing trips should continue to grow regardless of wherever earnings may go in the short-term.
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5 of the Best Stocks to Buy for March originally appeared on usnews.com
