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In this article, we take a look at the 10 best stocks to buy as an investment. If you want to see more best stocks to buy for investment, go directly to 5 best stocks to buy for investment.
While different people have different opinions on what are the best stocks to invest in, a fair number of investors believe that the stocks of leading companies with significant competitive advantages, whose stocks are generally less volatile, could be good candidates.
Less volatile stocks generally don’t move as much as the broader stock market because the future financial performance of less volatile stocks is arguably more predictable. However, there are certain times when less volatile stocks can be more volatile, such as during earnings.
Less volatile stocks include leading consumer staples whose demand doesn’t change much in tougher economic times. Some less volatile stocks are conglomerates or have multiple leading brands. As a result of having multiple different companies or multiple different brands, the results of the overall company may not change as much as the results of an individual company or brand.
Many of the same leading stocks with generally lower betas also have reasonable growth prospects for a variety of reasons. For some companies, they may have significant growth potential in faster-growing emerging markets such as India. For other companies, they can buy back many of their shares. If a company buys back substantial shares and does not issue new shares, earnings per share may grow even if total earnings remain the same.
While they can have fairly predictable companies, individual stocks can still underperform if, say, a company makes a bad acquisition or if overall market demand isn’t as strong as expected. Therefore, it can be a good idea for long-term investors to have a well-diversified portfolio of leading stocks in many different sectors.
In terms of 2023, many of the lower beta leading stocks have not risen as much as the market has so far. In some cases, lower volatility stocks have fallen since the start of the year as individual corporate earnings have not been as strong as expected. Nevertheless, analysts expect the leading consumer staples conglomerates mentioned in this article to grow in the long term.
New York Stock Exchange
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Methodology
For our list of the 10 best stocks to buy for investment, we picked 10 stocks that have lower betas than the overall market and have decent growth potential according to their EPS ratio for the next 5 years.
We ranked each of the 10 stocks by their market cap as of 2/15.
For those of you interested, check out 10 Best Stocks to Buy for an 18 Year Old.
10 best stocks to buy for investment
10. The Clorox Company (NYSE:CLX)
Market cap as of 2/15: $18.99 billion
EPS growth forecast for the next 5 years: 13.38%
Consumer staples The Clorox Company (NYSE:CLX) has a fairly high 5-year earnings per share growth forecast of 13.38% as its trailing TTM earnings per share is relatively low. As a result of trailing 12-month earnings per share of $3.51, The Clorox Company (NYSE:CLX) has a P/E of 43.79, which is quite high. As analysts expect faster earnings over the next 5 years, The Clorox Company (NYSE:CLX) could eventually grow to its valuation and still be an attractive investment for the next 10 years. Shares are up 9.55% year to date and 7.54% last year.
In addition to The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT) and Johnson & Johnson (NYSE:JNJ), The Clorox Company (NYSE:CLX) is a low beta stock with decent earnings per share growth potential.
9. Church & Dwight Co., Inc. (NYSE:CHD)
Market cap as of 2/15: $20.35 billion
EPS growth forecast for the next 5 years: 7.81%
Church & Dwight Co., Inc. (NYSE:CHD) is a large consumer that owns well-known brands such as Arm & Hammer. For the full year 2022, the company’s net sales increased 3.6% year-over-year and organic sales increased 1.4% year-over-year. Adjusted earnings per share were $2.97, down 1.7% from adjusted earnings per share in 2021. Shares of Church & Dwight Co., Inc. (NYSE:CHD) are down 14.46% over the past year on weaker results, in part due to higher inflation. Although the revenues of Church & Dwight Co., Inc. (NYSE:CHD) have not risen in 2022, analysts expect the company to earn $3.07 per share in 2023, $3.33 per share in 2024 and $3.60 per share in 2025.
8. Kimberly-Clark Corporation (NYSE: KMB)
Market cap as of 2/15: $43.12 billion
EPS growth forecast for the next 5 years: 9.49%
Kimberly-Clark Corporation (NYSE:KMB) is a leading personal care company that makes paper-based consumer products. In terms of portfolio, Kimberly-Clark Corporation (NYSE:KMB) has brands sold for $5 billion in more than 175 countries. In 2021 terms, emerging and emerging markets accounted for 30% of net sales.
When it comes to organic sales growth, the company has averaged about 3% growth between 2019 and 2021. For 2022, full-year adjusted earnings per share of Kimberly-Clark Corporation (NYSE:KMB) fell 9% year over year to $5.63. In terms of outlook, the company expects net sales to grow 0 to 2 percent in 2023, including organic sales growth of 2 to 4 percent.
7. Colgate-Palmolive Company (NYSE:CL)
Market cap as of 2/15: $60.72 billion
EPS growth forecast for the next 5 years: 6.02%
Colgate-Palmolive Company (NYSE:CL) is a leading consumer products company that makes toothpaste, mouthwash and more. Analysts expect Colgate-Palmolive Company (NYSE:CL) to grow its annual earnings per share at an average of 6.02% over the next 5 years. Specifically, analysts expect the company’s earnings per share to increase from $2.97 in 2022 to $3.11 in 2023, $3.40 in 2024 and $3.70 in 2025. Shares of Colgate-Palmolive Company (NYSE :CL) have a dividend yield of 2.59% as of February 15. .
6. Unilever PLC (NYSE:UL)
Market cap as of 2/15: $130.31 billion
EPS growth forecast for the next 5 years: 6.9%
Unilever PLC (NYSE:UL) is a leading home and personal products company with underlying sales growth of 9% through 2022. However, for the year, the company’s underlying earnings per share fell 2.1% year-on-year to €2. 57. In 2022, the company bought back 1.5 billion euros worth of shares and also paid out 4.3 billion euros in dividends. For 2022, Unilever PLC (NYSE:UL) added: “Unilever delivered a year of strong sales growth in a challenging macroeconomic environment. Underlying sales growth was 9.0%, driven by disciplined pricing in response to high input cost inflation. Growth was broad-based in each of our five Business Groups, led by a strong performance from our brands worth more than €1 billion. Despite the sharp rise in material costs, we have prioritized increasing our brand and marketing investments. Underlying operating margin was delivered in line with our guidance, with underlying operating profit up for the year.”
Shares of Unilever PLC (NYSE:UL) are up 2.44% this year and have a dividend yield of 3.49% as of February 15.
Like Unilever PLC (NYSE:UL), The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT) and Johnson & Johnson (NYSE:JNJ) low beta stocks with decent earnings per share growth potential.
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Disclosure: none. 10 best stocks to buy for investment was originally published on Insider Monkey.
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