Whether you’re new to investing or want to beef up your existing portfolio, the end of 2018 is the time to start thinking about 2019. The new year will be upon you before you know it.
Before you plunk down any money or trade your current shares, let’s take a look at what next year might hold in store. There are no guarantees, but these look like the top 100 stocks to buy in 2019.
There are two stock categories that are considered ‘defensive’ because they are the least likely to change, even with big market swings. These stocks represent products and services that consumers always need, regardless of the economy.
While defensive sector stocks tend to provide a cushion in bad times, because of their very nature, they offer less opportunity for profit than other sectors.
Kraft Heinz (KHC): This enormous food conglomerate is the result of the 2015 marriage of Kraft Foods and Heinz. Half the items in your pantry probably come from KHC. With a recent dip in performance, this is a good buy. Steady profit margins bode well for 2019.
Constellation Brands (STZ): As the failure of Prohibition demonstrated, people enjoy alcohol in every economic climate. STZ has 100 beer and wine brands in its portfolio and is the largest beer importer in the US. Stability will likely be enhanced by legal cannabis investments.
CVS Health (CVS): CVS crosses categories in both consumer staples and healthcare with its $69 billion Aetna purchase. Nevertheless, this drugstore giant has been a high performer in staples, with its personal care items and other goods.
Costco (COST): The bulk retailer has been hitting record highs this year, and more growth is predicted. Fluctuating gas prices might affect Costco negatively, but it’s generally felt it will weather the fuel storm with food and essential home goods.
JM Smucker (SJM): If you think Smucker’s is all about jam, think again. This company owns Folgers, Pillsbury, Meow Mix, and Jif, among others. With four brands that hold high positions for market share, including the growing category of pet food, the force is strong.
Other great buys in this sector include tobacco colossus Altria Group (MO), Walmart (WMT) The Hershey Company (HSY), Clorox Co (CLX), and McCormick (MKC) spices. Kellogg (K) is making inroads in the snack market to counter fickle cereal buyers.
Duke Energy (DUK): Duke Energy operates primarily in regulation-friendly Florida and the Southeast. It serves fast-growing Orlando and Tampa and has launched a new capital spending plan, including grid modernization and natural gas investments.
NRG Energy (NRG): With headquarters in both Connecticut and Texas, NRG has been in acquisition mode over the last decade and is testing the waters in green energy. NRG outperforms its sector in growth, and that is expected to continue in 2019.
Exelon (EXC): Exelon is a combination of a regulated utility and a merchant utility and has some of the best of both. It’s growing nicely, with returns like regulated utilities. It may also be undervalued, so it’s a good time to snatch it up.
Nextera Energy (NEE): If you want some green energy in your portfolio, NEE is a company to look at. Its subsidiary operates cost-effective wind and solar energy farms, as well as Florida Power & Light. Growth is predicted for the next five years.
American Water Works (AWK): This water utility provides drinking water and wastewater services to 1600 communities in the US and Canada. It has upgrades and capital projects planned over the next five years and will likely show impressive dividend hikes.
Dominion Energy (D): Dominion makes its name on diversity and high yields. However, a rocky 2018 in terms of increased expenses makes this utility a higher risk. If you’re into aggressive investing with the potential for 10-percent dividends, this might be for you.
Cyclical sector stocks are more subject to the whims of the market and the economy, both national and global, hence their name. However, these stocks provide a greater chance to make money because there is a more inherent risk to them.
Amazon.com (AMZN): This online mega-retailer is giving giants like Kimberly-Clark and Procter & Gamble a run for their money. It could nearly fit into the consumer staples sector and Amazon isn’t just entertainment. It shines in discretionary for its growth and diversity.
Netflix (NFLX): Netflix, a rival to Amazon in streaming content, saw lower than expected revenues this summer, but expect those numbers to climb again. With millions invested in overseas expansion and original series, Netflix looks poised for a comeback.
Walt Disney (DIS): While Disney can’t yet give Netflix or Amazon a run for their streaming money, it has its fingers in other entertainment pies. In addition to its ESPN programming, Disney’s 20th Century Fox purchase has them in line for 2019 growth.
Carnival (CCL): Carnival Cruise Lines may be benefiting from the Millennials shift from purchasing tangible items to experiences. Carnival has been growing this year, and experts expect that trend to extend over the next several years.
Kohl’s Corp. (KSS): From an immigrant’s corner store in Milwaukee to a national chain, Kohl’s seems to be the American dream. Has it reached its limit with this year’s double gains? Experts say no, based on new sales divers, rival closures, and strong balance sheet.
Home Depot (HD): Home Depot is on virtually every list for 2019. It’s thrived over the last decade and has been smart about limiting new locations. The next 10 years look equally good with customer innovations and little competition from Amazon.
Target Corp. (TGT): Target is another retailer that, like Amazon, verges on fitting in the consumer staples sector. With great 2018 performance, investment in customer satisfaction, and no more Toys “R” Us competition, Target has positioned itself well.
Looking for more consumer discretionary stocks to add to your portfolio? Give a thought to venerable Ford Motor Corp. (F), media giant Viacom (VIAB) for value investors, Hanesbrands (HBI), and GameStop (GME).
Consider Tupperware (TUP), if you want a bargain-priced gamble that might or might not turn around with help from high tech. “Alexa, are my leftovers still fresh?”
EOG Resources (EOG): EOG is an independent energy explorer/producer and experts in shale and pipeline. If you’re looking for a company that’s making money with fracking, this is a solid pick.
Chevron (CVX): Chevron is a classic, and it’s a top pick for dividend lovers (31 consecutive years of increases). Revenue is expected to grow by leaps and bounds over the next year at least.
Valero (VLO): You may know Valero for its gas stations and mini-marts. But this company is the largest independent petroleum refiner in the world. The company has rebounded after a few rough years prior to 2016, and dividends are predicted to rise.
National Oilwell Varco (NOV): Headquartered in Houston, NOV is the world’s largest provider of equipment for fuel drilling and production. While this is generally rated as a ‘hold’ stock at present, it might be a good one to buy as a long-term prospect.
Like the energy sector and want to buy more? Here are some suggestions:
- Pioneer Natural Resources (PXD).
- Ensco (ESV).
- Transocean (RIG).
- Phillips 66 Partners (PSXP).
- Jagged Peak Energy (JAG).
Ares Capital (ARCC): In the world of business development, Ares is a top contender. Due to recent legislation, ARCC will be able to double debt-based leverage. This means they will make more money for every dollar they invest in small businesses as capital.
Bank of America (BAC): Bank of America has been churning up the competition lately. This institution is known for its diversified array of services. Skeptics question whether or not it can continue at its current rate of growth, but so far, it looks rosy.
Charles Schwab (SCHW): Everyone knows this brokerage, but it’s not to be overlooked. They weathered the US presidential transition well when other investors did not. With a hands-on CEO and great bottom-line growth, they are setting the bar for other brokerages.
Financial stocks are not everyone’s cup of tea because they are directly linked to more volatile areas of the economy.
But if you like these stocks, check out Goldman Sachs (GS), CIT Group (CIT), US Bancorp (USB), and BofI Holding (BOFI). The latter makes its money in the online banking realm, with surprising low overhead to get in the way of profits.
Genesis Healthcare (GEN): GEN offers rehab care for post-acute patients. New financing commitments bode well for future growth after a slump due to heavy debt. Just watch Medicare and Medicaid with this one, as they are closely tied through reimbursements.
Johnson & Johnson (JNJ): A blue-chip healthcare company, JNJ sees profits from three categories: medical devices, pharmaceuticals, and consumer goods, like baby products. This has been a successful strategy for decades and will contribute to their continued upward trajectory.
Abiomed, Inc. (ABMD): Abiomed makes pumps used during cardiothoracic surgery. Revenue has been soaring, due largely to expansion into the European surgical market. With cardiac disease still a number one killer worldwide, there is infinite room for growth.
Merck (MRK): Merck, a warhorse of the pharma world, is revered for its predictability. With a diverse drug portfolio that includes veterinary products, Merck continually enjoys high revenues. It also buys up other big names with ease when it sees new drug potential.
Boston Scientific (BSX): This company based in the Bay State is a leading maker of medical devices and instruments. They squeaked through a rough 2013 and since 2015 has demonstrated year-after-year quarterly growth in revenue.
Tandem Diabetes Care, Inc. (TNDM): Competition between diabetes pumps is fierce. But TNDM’s new technology to combat low blood sugar with a specially designed automated insulin pump looks like a winner.
The healthcare sector is popular due to the high volume of new technology and drugs coming to market. Other predicted high performers in this industry, according to experts, include:
- Vertex Pharmaceuticals (VRTX).
- Pfizer (PFE).
- Celgene (CELG).
- Intersect ENT (XENT).
- Eli Lilly (LLY).
- Stryker Corporation (SYK).
- Biogen (BIIB).
Honeywell (HON): You’ve probably seen the Honeywell label on everything from airplane parts to home HVAC systems. EPS growth will likely be strong over the next year, with a healthy average over the next three to five years.
Lockheed Martin (LMT): With its involvement in defense, aerospace, and security, LMT has made investors happy over the decades. Share price is predicted to grow, in addition to dividends. As long as LMT remains a Pentagon supplier, its future looks bright.
3M (MMM): The Minnesota star has its name on everything these days. It’s not necessarily its diversified product line that investors love but its dividends.
Waste Management (WM): No matter what happens to the economy, people still need to dispose of their trash. Waste Management had a big jump recently, and it is poised to continue its climb through this year and into next. WM is a recommended buy and hold.
Xylem (XYL): Xylem manufactures equipment for water treatment and wastewater management. This is a vital area in a world of ever-increasing drought. Xylem is busy buying up smaller companies and quietly turning in consistent profits.
Can’t get enough of the industrial sector? If you pay attention to military, construction, and shipping/logistics news, you may find some attractive buys.
Take a look at Caterpillar (CAT), UPS (UPS), Union Pacific Corp. (UNP), Emerson Electric (EMR), and Rockwell Automation (ROK).
Hewlett Packard Enterprise (HPE): The enterprise segment of HP was spun off the main company and is shooting for widened profit margins. This is a good buy with low risk.
Apple (AAPL): The first US company to reach a $1 trillion market cap, Apple also crossed the $2,000 share price this summer. While revenue is perhaps a little too closely tied to iPhone sales, Apple is still a recommended tech buy if you can afford it.
Microsoft (MSFT): Microsoft has been having a nice run of late, and it might be underpriced. Tax reform has bolstered growth, and a dividend hike is expected in the fall of 2018. Microsoft appears to be on track to meet a target price of $130 next year.
Cisco Systems (CSCO): Cisco Systems has been working hard at improving performance, and it’s paid off. After a couple of tough years, revenue is climbing. Cisco is expected to be a slow but steady grower for the second half of 2018 and 2019.
Tech is always a weighty sector on the exchanges, and there is a lot to choose from. In addition to the above, check out:
- GoPro (GPRO).
- Twitter (TWTR).
- Fitbit (FIT).
- Silicon Motion (SIMO).
- Texas Instruments Incorporated (TXN).
- Alphabet (GOOGL).
Westrock Company (WRK): Westrock is a leader in paper and packaging. Earnings are climbing, and this is an alternative to chemicals and automotive materials.
Hexcel Corp. (HXL): Hexcel makes carbon fiber and composite materials for airplanes. Lightweight materials are in high demand to allow for wider airframe bodies, so Hexcel is well positioned with the new Boeing 777X release.
Albemarle (ALB): ALB is the planet’s largest producer of lithium, a key material in batteries and electronics. Albemarle also manufactures chemicals used in flame retardants and refining. As long as it doesn’t overproduce, ALB will stay bearish.
Want some other materials sector picks? Try Trex Company Inc (TREX), Constellium NV (CSTM), Quaker Chemical Corporation (KWR), or Eastman Chemical Company (EMN).
National Health Investors Inc. (NHI): Growth has been strong with NHI and is expected to keep climbing. Dividends have increased steadily over the last 10 years.
Welltower (WELL): Welltower is a top healthcare REIT (real estate investment trust). Since the bulk of its revenue comes from private-pay patients, WELL can weather government-related changes to the healthcare economy.
Iron Mountain (IRM): Here’s a niche that’s less tapped in the real-estate industry: data and record storage facilities. Because the overhead is low in these enterprises, profit margins can be attractive. Turnover is low, with the average item being stored for over 12 years.
Other real estate investment trusts to consider include:
- Simon Property Group (SPG).
- Saul Centers (BFS).
- EPR Properties (EPR).
Comcast (CMCSA): While it may not have appeared so, Comcast’s loss of 20th Century Fox to Disney may actually be a boon. Now Comcast can go after UK-based Sky and keep its shareholders content.
AT&T (T): As the world’s largest communications business (according to revenue), AT&T boosted its hold on the market with the Time Warner merger. If AT&T can get rid of the debt from this pairing, it will see revenues that make investors happy.
Verizon (VZ): With a network that covers nearly 100 percent of the US, Verizon is planning to triple its media business over the next several years. With the advent of 5G technology, Verizon will be even more competitive.
Qualcomm (QCOM): Qualcomm tops the world in semiconductor and telecommunication equipment. Acquisition of NXP Semiconductor will strengthen their market.
Other telecom stocks to keep an eye on are: Charter Communications (CHTR), Dish Network (DISH), Sprint (S), Vodafone Group (VOD), and Discovery Communications (DISCA).
Summing It Up
With midterm elections in the US, it’s possible the economy will change in unpredictable ways. If only we had a crystal ball for 2019 investments.
With any stock purchases, follow the news closely and track the stock to look for new trends. Use this list, and you should find plenty of investment opportunities for the coming year.