These top large-cap stocks offer potential in the final weeks of 2023.
In September, most investors were probably wondering when the pain of 2022 would end. But now, after the S&P 500 has tacked on more than 7% since the start of October, some traders are starting to wonder if there may be some buying opportunities this year after all. As energy sector trades get a bit long in the tooth, now may be a great time to reassess what’s working over the last several weeks and position your portfolio for success in the New Year. Here are seven large-cap stocks that could prove their scale and profit potential over the next 12 months.
Altria Group Inc. (ticker: MO)
Altria is only down about 9% on the year, logging half the declines of the S&P 500 in the same period. As the behemoth of a tobacco company behind Marlboro cigarettes, Black & Mild pipe and cigar products, and smokeless tobacco like Copenhagen and Skoal, it dominates the U.S. market for those who are looking for a nicotine fix. Even if there isn’t breakneck growth ahead, Altria knows how to manage its operations. The company has logged more than 50 consecutive years of dividend increases, and boasts an amazing yield of 8.6% that should make any income investor’s mouth water.
AT&T Inc. (T)
AT&T has gone through some restructuring that has helped streamline its operations as well as beat back some of its debt load. That move couldn’t have come at a better time, either, as borrowing costs for businesses and consumers are going through the roof thanks to rising interest rates. This $133 billion telecom has an entrenched wireless business in the U.S., and even though its top and bottom line are ostensibly shrinking after the divestiture of media-related assets, it will be a leaner and more focused company in 2023. Shares have surged more than 20% in the last 30 days thanks to optimism about the fate of AT&T after a great third-quarter earnings report.
Cardinal Health Inc. (CAH)
While some stocks have stumbled in the last year, Cardinal has tacked on an amazing 46% gain year to date through Nov. 16. Part of that reason is because it’s a low-risk stock that provides products and services to health care facilities, including lab products, protective equipment, bandages and other necessities. There’s a rock-solid backbone to revenues with a business like that. What’s more, last year CAH signed a deal with pharmacy giant CVS Health Corp. (CVS) to supply it with gear through 2027 — locking in even more long-term stability. And while the stock hit a bit of a snag in February after a $6.4 billion settlement related to opioid marketing, payments are spread out over 18 years, allowing Wall Street to breathe a sigh of relief. The stock is riding strong momentum and strong operations into the New Year.
Consolidated Edison Inc. (ED)
Dividend investors love ConEd because, while it isn’t the largest utility stock out there, it is perhaps the most reliable dividend payer in the entire sector. Founded in 1823 and riding on more than 48 years of consecutive dividend increases, the stock currently yields 3.5% but is likely to see that payout grow over many more years to come. The company can do so because of reliable operations distributing electricity to about 3.5 million customers in the New York City area and natural gas to 1.1 million more. It’s admittedly not dynamic, but the highly regulated nature of utilities and the necessity of energy to heat homes and power businesses mean that ED is as close to a sure thing as you can find in the stock market.
JPMorgan Chase & Co. (JPM)
This $387 billion banking powerhouse has a diversified financial operation across business lines and geographies, ranks as one of the top-five institutions in the world, and is the largest U.S. commercial bank. That gives it the scale to provide stability in the long term. Recently, the stock has been riding strong momentum after the market bottom in September to tack on a 27.4% gain from Oct. 3 through Nov. 16. And why not, considering Wall Street is expecting revenues to grow by more than 8% in 2023 even amid global uncertainty? This is the kind of dominant large-cap stock that investors can rely on regardless of whether a bull market returns in earnest next year or not.
Merck & Co. Inc. (MRK)
Pharmaceutical giant Merck commands a market value of $258 billion and is a top performer in 2022, with gains of more than 30% since Jan. 1. Merck’s current portfolio of multibillion-dollar blockbusters includes cancer immunotherapy Keytruda, HPV vaccine Gardasil and diabetes treatment Januvia. And on top of this, the company has lined up a chain of acquisitions over the last year ranging from a deal to purchase messenger RNA specialist Exelead to animal health company Vence to diversify its offerings. With health care’s history as a recession-proof sector that holds up well in any market environment, the momentum behind Merck should serve it well regardless of what happens in the year ahead.
Walmart Inc. (WMT)
In November, Walmart returned to positive territory on pessimism for its rival Target Corp. (TGT) and optimism that consumer tastes would favor WMT in the holiday season and 2023. The result is a stock that is simply on fire, with shares up more than 25% from their lows in June. The $400 billion retailer is in the sweet spot for shoppers right now, with low prices that will appeal to cost-conscious consumers and the scale to ensure it’s the first and perhaps only stop on any shopping trip. Strong momentum in this stock now should carry over into the new year and provide investors an opportunity to finally look beyond the typical energy stocks and “risk off” plays of 2022 to dip a toe back into retail with confidence.
7 of the best large-cap stocks to buy for 2023:
— Altria Group Inc. (MO)
— AT&T Inc. (T)
— Cardinal Health Inc. (CAH)
— Consolidated Edison Inc. (ED)
— JPMorgan Chase & Co. (JPM)
— Merck & Co. Inc. (MRK)
— Walmart Inc. (WMT)
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7 of the Best Large-Cap Stocks to Buy for 2023 originally appeared on usnews.com
Update 11/17/22: This story was previously published at an earlier date and has been updated with new information.
