5 of the Best Stocks to Buy for December

November was a strong month for stocks, with the benchmark S&P 500 gaining more than 5%. This came on top of the market’s big rally in October. Lower inflation numbers have given traders new optimism. Now that inflation appears to be moderating, it has given the Federal Reserve the ability to start talking about a move to a more neutral interest rate policy.

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Thanks to this potential Fed pivot, most stocks have come roaring back. However, not all stocks have participated in the rally. These five stocks to buy for December are still trading within 10% of their 52-week lows. That means that while the market as a whole has turned the corner, these five top stocks could still offer value heading into the holidays:

— Medtronic PLC (ticker: MDT)

— CME Group. Inc. (CME)

— Dominion Energy Inc. (D)

— Equity Residential Properties Trust (EQR)

— Vodafone Group PLC (VOD)

Medtronic PLC (MDT)

Medtronic is a large multinational medical device company. The company’s core competency has been in products for treating chronic heart conditions. It has a number of other products for areas such as diabetes management. The company’s recent earnings results have been underwhelming, leading shares to sharply underperform the market lately. On a total return basis — which includes dividends

— shares are down roughly 22% year to date through Dec. 1, and the stock is just a few bucks above its recent lows.

Several factors have caused the weakness. For one, about half of Medtronic’s revenue comes from overseas. So, it’s been up against stiff headwinds due to the declines in the value of the euro and other major international currencies. On top of that, demand for some medical devices hasn’t bounced back as quickly as expected following the pandemic, which had disrupted hospital schedules. All that said, shares have fallen too far and now sell for less than 15 times forward earnings while offering a 3.6% dividend yield.

CME Group. Inc. (CME)

CME Group is a leading operator of financial markets. CME’s exchanges cover a wide range of product types such as energy, commodities, stock futures and options, interest rates, Bitcoin

and more. The firm has been highly acquisitive over the years, adding a number of other exchanges and products to its arsenal such as a stake in the company which operates the S&P Dow Jones Indices.

On paper, 2022 should have been a great year for CME. Rising levels of volatility tends to lead to higher and more sustained trading activity. That’s particularly true in a market like interest rates, which has seen a year full of massive Fed rate hikes and sky-high inflation figures, turning this formerly sleepy market into a front-page story. So why is CME stock near its lows? Cost pressures have limited profit growth this year. Meanwhile, the distress in cryptocurrency markets is likely to be a headwind for Bitcoin trading volumes. Regardless, through Dec. 1, CME stock is down 21% this year on a total return basis, putting it at a reasonable 21 times forward earnings.

Dominion Energy Inc. (D)

Dominion Energy is a large, regulated utility company. It has dramatically simplified its operations in recent years. It has gotten out of its prior oil and gas holdings

and is reportedly looking to exit a position in a major liquefied natural gas facility as well. In return, the company is investing in long-term, highly capital-intensive opportunities in renewable energy, primarily in wind farms. These potentially give Dominion the ability to invest up to tens of billions of dollars in green energy with state-backed guaranteed returns on deployed capital in the years and decades to come.

The focus on clean energy should also help Dominion obtain a higher valuation from sustainability-focused investors. Shares lost more than a quarter of their value since August in large part due to fears related to rising interest rates. With the worst potentially over, this could be a turning point for utility stocks like Dominion.

Equity Residential Properties Trust (EQR)

Equity Residential is a large American apartment owner. The company currently operates approximately 80,000 apartment units primarily in big top-tier markets such as New York, Boston, Seattle and San Francisco. Equity Residential enjoyed favorable conditions over the past two years due to the strong housing market. People looked to upgrade their living conditions during the pandemic, leading to a huge tail wind for housing.

This also benefits apartment owners, since as house prices go up, it becomes more difficult to buy a home outright. This causes many people to be willing to keep renting at Equity’s apartment communities at higher prices. To put a number on that, Equity was reporting 13% year-over-year rent price growth earlier this year. However, that growth seems bound to fade now that the housing market has rolled over. That said, investors might be overreacting. Equity Residential shares are now merely flat over the past five years, and the stock’s yield is up to 4%.

Vodafone Group PLC (VOD)

Vodafone is one of Europe’s largest telecom companies. It is Germany’s second-largest mobile carrier and has extensive operations in the United Kingdom, Italy, and various other smaller European and African countries. Results have been soft this year. That should be expected given the downbeat state of the European economy. Russia’s invasion of Ukraine

has placed major stress on the European financial system, leading to far higher inflation, a slumping euro, and a great deal of uncertainty in the energy and electricity markets.

Vodafone is attempting to raise prices to offset cost pressures, however, the poor economic conditions may make that a tough balancing act. Regardless, this weakness is more than reflected in Vodafone’s share price. With its steep decline this year, Vodafone is now going for less than 11 times forward earnings while offering a handsome 8.4% dividend yield.

More from U.S. News

9 Highest Dividend-Paying Stocks in the S&P 500

9 Growth Stocks That Also Pay Dividends

9 Dividend Stocks to Buy and Hold Forever

5 of the Best Stocks to Buy for December originally appeared on usnews.com

Update 12/02/22: This story was previously published at an earlier date and has been updated with new information.

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