Investing in equities is a good idea. That doesn’t mean stocks are risk-free or that the market can’t go down for an extended period. It only means that, in the long run, stocks tend to go up, and that equities are a good bet for investors with long investment horizons.
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But which stocks should you choose, and how should you pick them? With thousands of public companies trading on the stock exchanges, hundreds of data points to consider and an incredible amount of news and information in the financial media, building a sound portfolio can seem like a daunting task.
Fortunate for the retail investor, there’s a lot of great information and solid stock picks available from highly credible and reliable sources. Some of the best sources of quality stock recommendations are Wall Street analysts.
Most large investment firms maintain a proprietary equity research department staffed with experts who have particular industry expertise. In addition to in-house analysts, many well-regarded, independent research firms generate stock ideas that the average investor can take advantage of. In some cases, an investor must be a paying client to access the most comprehensive research, but a lot of good information is freely available online or at other resources such as public libraries.
The published ratings and stock recommendations of professional analysts are more than guesswork or intuition. The best equity analysts have years of industry experience and have access to an incredible amount of sector- and company-specific information. They do their best to provide sound information and good stock picks. After all, their reputations are on the line every time they rate a stock.
This list of five recommended stocks illustrates the value of quality research. The key fundamentals have been painstakingly researched, and the financial fundamentals have been thoroughly scrutinized. The analysts and companies recommending these names do so with confidence. That fact should give the individual investor confidence as well. The five selected stocks either are recommended as a “buy,” a “strong buy,” “outperform” or “overweight,” which are all terms that generally mean a stock is recommended, but the terms may differ slightly from ratings firm to ratings firm. As always, consider these recommendations with a grain of salt, because even the very wise cannot see all ends.
| Stock | Market capitalization | Forward Dividend Yield* |
| CVS Health Corp. (ticker: CVS) | $85 billion | 3.9% |
| RTX Corp. (RTX) | $179 billion | 1.9% |
| Americold Realty Trust Inc. (COLD) | $6 billion | 4.2% |
| Enterprise Products Partners LP (EPD) | $73 billion | 6.3% |
| Microchip Technology Inc. (MCHP) | $29 billion | 3.4% |
*As of March 18 close.
CVS Health Corp. (CVS)
Most investors will recognize CVS as a major player in the chain drugstore space. After all, the company has close to 9,000 physical locations on street corners all over America. This company, however, is much more than a retail pharmacy.
CVS is making a meaningful impact in the health insurance and pharmacy benefits management industries. They work with individuals, employers and employees to ensure seamless access to drugs, treatments and all the insurance benefits customers are entitled to.
The equity research arm of Morningstar has been bullish on CVS for some time. The firm has a “buy” rating on the stock and assigns it five out of five stars. Morningstar senior equity analyst Julie Utterback reiterated that rating on Dec. 18. Utterback is impressed with how successfully CVS has positioned itself as a managed care leader. She specifically cited the company’s acquisitions of benefits manager Caremark, health insurer Aetna and health service provider Oak Street. BofA Securities also rates the company a “buy,” as does Truist Securities. Wells Fargo and Barclays are also bullish on the name. Both of those firms rate the stock “overweight.”
Additionally, CVS has a forward dividend yield of 3.9%.
[READ: 7 Ways to Invest With a Weakening U.S. Dollar.]
RTX Corp. (RTX)
RTX is one of the most highly regarded and universally recommended stocks on Wall Street. UBS, BofA Securities, Deutsche Bank and CFRA Equity Research all rate the stock a “buy.” Wells Fargo has an “overweight” rating on the stock, and RBC Capital rates it “outperform.”
RTX is the successor company to the high-tech aerospace firm Raytheon Technologies Corp. This aviation technology firm engineers and manufactures state-of-the-art defense and aviation systems for U.S. and NATO governments, militaries and commercial customers globally. It is quickly integrating artificial intelligence, or AI, into its design and manufacturing processes. Wall Street believes that this strategically important firm will be a major contributor to space and satellite operations in the communications field and, eventually, in commercial space travel.
Though perhaps best-known for its Pratt & Whitney engines and heavy aircraft components, RTX is more than just an engine and parts company. This $179 billion company provides software solutions as well. Its Raytheon division provides defensive and offensive threat detection and tracking solutions that are designed to seamlessly integrate with modern weapons systems.
The forward dividend yield for this stock currently stands at 1.9%.
Americold Realty Trust Inc. (COLD)
Americold is a very unique real estate investment trust, or REIT, that operates in the industrial class of commercial real estate. More specifically, this $6 billion REIT owns and leases temperature-controlled — that is to say, refrigerated — warehouses.
As one might imagine, Americold’s customers are mostly in the perishable food industry, but they also rent space to pharmaceutical companies, florists, chemical companies and other businesses that distribute temperature-sensitive products. Its client diversification demonstrates the company’s ability to handle a wide range of items that need to be stored at cold or freezing temperatures.
After listening to the company’s earnings call on Feb. 20, BofA Securities research analyst Joshua Dennerlein reiterated his firm’s “buy” rating on the stock. Dennerlein believes that upside benefits from ongoing platform improvements will continue to drive margin expansion for the company. He placed a $30 price objective on the stock, which closed at $22.18 on March 18, suggesting an upside of 35%. Truist Securities also has a “buy” on the stock. Raymond James and Scotiabank rate the company as “outperform.”
Because the company is organized as a REIT, investors can expect a regular income dividend. The stock’s forward yield is 4.2%.
Enterprise Products Partners LP (EPD)
The next stock on this list is technically not a stock at all; it’s a master limited partnership, or MLP. An MLP is a public company that’s organized as a partnership rather than a corporation. MLP shares are called units, and they receive a different tax treatment from the IRS but otherwise function like shares of common stock.
EPD operates in the midstream energy services industry, meaning it is involved in the storage, transportation and processing aspects of the energy business rather than in exploration or distribution. EPD owns and operates a vast network of oil trucks and oil pipelines, natural gas pipelines and several petrochemical storage facilities and transportation hubs. It also processes natural gas at its facilities in New Mexico, Texas and Wyoming.
Of the 20 Wall Street analysts that follow the company, 14 of them have the equivalent of a “buy” or “strong buy” rating on the stock. Those include BofA Securities and CFRA, which both rate the stock a “buy,” and Barclays, which maintains an “overweight” on the name.
MLPs are considered reliable income vehicles, and EPD is no exception. The $73 billion stock has a forward dividend yield of 6.3%.
Microchip Technology Inc. (MCHP)
No list of recommended stocks would be complete without a technology name. MCHP fits the bill. Rosenblatt Securities, B. Riley Securities and Needham & Co. all rate the stock “buy,” while Mizuho Securities maintains an “outperform” rating on the company. Raymond James is quite bullish on MCHP as well, it rates the stock a “strong buy.”
MCHP is a $29 billion chipmaker that designs, manufactures and sells smart, connected, secure embedded control solutions to its 123,000 global customers who need to optimize technology resources. Its clients include automotive manufacturers implementing advanced robotics, consumer electronics companies that need the latest microchips for their manufacturing processes, and computer companies that install MCHP’s processors in their products.
The company’s main products are 8-bit, 16-bit and 32-bit mixed-signal microprocessors and microcontrollers. These chips are the workhorses of the tech industry and are always in high demand.
The stock has real potential for significant capital appreciation over time, but it also has a forward dividend yield of 3.4%.
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5 Best Recommended Stocks to Buy Today originally appeared on usnews.com
Update 03/19/25: This story was previously published at an earlier date and has been updated with new information.
