by James Brumley | July 3, 2014 10:50 am
It’s that time of year again — time to celebrate the birth of our nation.
The most common way of observing Independence Day typically involves fireworks and grilled food enjoyed with friends and family.
For investors, though, what’s more patriotic than looking for a few great American stocks to buy? After all, even with all the nation’s challenges, there’s still nothing quite as compelling as good ol’ American corporate spirit.
But which American stocks are the best stocks to buy here in the shadow of the 4th of July? There are plenty of strong possibilities out there to be sure, but five classic American names top the list.
In no particular order …
Is it cliche by this point to say Apple (AAPL) is one of the quintessential American stocks to buy?
Of course it is, but that doesn’t mean it’s not an accurate assessment.
Apple’s iPhone line is the most popular single brand of smartphones sold in the U.S., and though the technological leaps between each release of the iPhone are getting smaller, demand for each iteration of the smartphone somehow seems to be bigger than it was for the prior version.
That’s not the only reason Apple belongs on a list of American stocks to buy, however. There’s outright value here. Even with the 36% run-up for AAPL stock over the past 12 months, shares are still valued at a palatable trailing price-to-earnings ratio of 15.7.
Coca-Cola (KO) doesn’t just dominate the country’s soda market. It established the soft drink category, and has largely defined it over the course of its 128 years of existence.
As it stands right now, America — and the world, for that matter — simply prefer Coke’s products to all other soft drinks. For perspective, sales of Coca-Cola made up 17.4% of the United States’ soda industry’s sales in 2013. In the number-two spot was Diet Coke, with 9%. Pepsi-Cola only enters the picture in the No. 3 slot, with a market share of 8.9% … and this despite the fact that Pepsi tends to win taste tests.
That’s the power of branding.
If it’s good enough for iconic Americans like Jay Leno, Elvis Presley and Evel Knievel in addition to fictional folks like Wyatt from Easy Rider and Captain America himself, then Harley-Davidson (HOG) is easily one of the best American stocks to buy.
And before Harley-Davidson is written off as an increasingly irrelevant supplier of transportation, know that the company is bringing its so-called “hogs” into the 21st century, recently unveiling an electric motorcycle. No, they don’t have the classic chrome-overload look and throaty sound, but the new electric Harleys are still cool in their own right.
What do Bounty paper towels, Crest toothpaste, Gillette razors, Charmin toilet paper and Ivory soap all have in common? They’re all classic American brands most of us remember always seeing on store shelves, as well as in our homes.
If they were to go away, a piece of our national history would go away too.
That’s not the most relevant answer to investors, however. Those five brand names, along with dozens of other smaller but just is fondly-memorable brands, also all fall under the Procter & Gamble (PG) umbrella and give the company a reliable baseline of revenues year in and year out.
The dividend yield of 3.2% isn’t too shabby, either.
An engine manufacturer may not be the most riveting investment idea out there, but what Cummins (CMI) lacks in pizzazz it more than makes up for with raw marketability. Its engines are known for being reliable, which is why you’ll find them being used in a variety of ways, ranging from powering diesel generators to pulling tractor trailers around.
There’s nothing more American-picturesque than an 18-wheeler driving into the sunset.
What makes CMI one of the top American stocks to buy here and now, however? Not only are Cummins engines reliable, they’re now remarkably fuel-efficient.
The recently unveiled Cummins/Peterbilt tractor is reported to be 75% more fuel-efficient than other rigs on the road, achieving 10.7 miles per gallon of diesel fuel vs. the more typical 6 miles per gallon other heavy-duty hauling trucks get. That translates into a huge savings for trucking companies … another American ideal.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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