If you have been trying to navigate market volatility, look no further. Amid ongoing trade war tensions, U.S. stock and bond yields once again pulled back in Tuesday’s trading. IG Group’s Jingyi Pan said on Wednesday that people are “finding it difficult to put a finger as to where the ongoing U.S.-China trade issue is headed. … The saying that we are a tweet [from President Donald Trump] away from the next trade escalation between U.S. and China had certainly grown to become the broad view.”
While market choppiness is hard to handle, there are still stocks that look compelling.
Here I scanned for stocks with a “Strong Buy” Street consensus. That’s based on the last three months of ratings from over 5,200 analysts. Some of these stocks are excellent dividend payers, others have strong defensive properties. Let’s take a closer look at the seven stocks that make the grade.
“Strong Buy” Stocks: Planet Fitness (PLNT)
With over 1,800 locations, Planet Fitness (NYSE:PLNT) is now one of the fastest-growing health club franchises in the U.S. In fact, Fortune just added Planet Fitness to its 2019 “100 Fastest-Growing Companies” list. PLNT now ranks #58 among the world’s top three-year performers in revenues, profits and stock returns.
It’s not surprising that such rapid growth has caught the Street’s attention. Right now six out of seven analysts are bullish on the stock’s outlook. Meanwhile the $84 average price target indicates sizable upside potential of 23%.
“Continued Share Gains, High Margins, and Accelerating Free Cash Flow … PLNT shares should continue to benefit from rising multiple and earnings increases” enthuses four-star Jefferies analyst Randal Konik. He has a $90 price target on Planet Fitness (32% upside potential).
Plus the analyst highlights PLNT’s suitability for the current environment given its defensive qualities — like the fact it has no exposure to China and is recession-resistant.
Konik’s bottom line: “We continue to view this story as one of the best in the market … it’s Amazonian both literally and figuratively.”
Interested in Planet Fitness stock? Get a free PLNT Stock Research Report.
Waste Connection (WCN)
I can’t pretend that waste management makes for the most exciting investing prospect. However, I would highly recommend taking a closer look at Waste Connections (NYSE:WCN). It’s the third-largest garbage collection company in North America.
“Combined with the defensive attributes of the waste sector and domestic economic exposure, we continue to recommend WCN as a core holding for investors,” writes RBC Capital analyst Derek Spronck.
Year-to-date WCN stock has recorded a robust performance, rallying 22%. And according to the Street, further growth lies ahead. With a “Strong Buy” consensus and a $104 average price target, analysts see shares climbing 15% in the coming months.
The RBC analyst tells investors that “Despite recycling and other commodity-related headwinds, the underlying fundamentals that support our positive investment thesis remain intact; namely attractive price-led organic growth, enhanced by elevated M&A, leading to out-sized free cash flow.”
Can credit card giant Mastercard (NYSE:MA) do no wrong? From the beginning of the year the stock has steadily rallied — racking up a 46% year-to-date gain. At the same time, 14 out of 15 analysts call the stock a buy. That’s with an average analyst price target of $310.
For Tigress Financial analyst Ivan Feinseth, MA stock deserves a “Strong Buy” rating.
“MA’s strong brand equity and market-leading position, together with its innovative ability and global opportunities, will continue to drive greater Return on Capital (ROC), gains in Economic Profit, and increases in shareholder value creation,” explains Feinseth.
Crucially, MA is benefiting from a global increase in electronic payments. At the same time, it is also able to create unique solutions for specific verticals. For instance, MA is partnering with Lyft (NASDAQ:LYFT) on the Lyft Direct MasterCard debit card. In addition, it provides the payment network for the Apple’s (NASDAQ:AAPL) credit card and is part of Facebook’s (NASDAQ:FB) Libra cryptocurrency team. That’s alongside ongoing dividend increases and share repurchases.
“We believe further upside in the shares exists from current levels and continue to recommend purchase,” Feinseth concludes.
Welcome to one of the S&P 500’s top dividend payers. AT&T (NYSE:T) is a longstanding member of the elite dividend aristocrat group with 34 consecutive years of dividend growth. This makes T stock a prime pick to outsmart volatility.
“Not only do dividend stocks as a group have less volatility year-to-year, they outperform non-dividend paying stocks over time as well,” Morgan Stanley’s Christopher Poch writes. “Over the last 90+ years, dividends have accounted for more than 40% of the total return equation.”
As far as T stock is concerned, investors currently enjoy a 5.8% yield and an annualized payout of $2.04 per share. The company even managed to maintain the dividend while snapping up WarnerMedia last year. No doubt about it — it’s an impressive performance. That’s reflected in the “Strong Buy” analyst consensus. In the last three months, seven out of nine analysts have published bullish calls on the stock.
Morgan Stanley’s Simon Flannery recently met with AT&T senior management and came away encouraged about the company’s progress across several business units. He notes that shares still trade at historically low absolute and relative valuation levels. He has a $37 price target on the stock.
Salesforce (NYSE:CRM) is on a high right now. The company just reported stellar earnings results. Shares have surged 6% higher in just five days. However RBC Capital’s Alex Zukin is confident that the best is yet to come. And that’s why I would highly recommend putting CRM on your wish list right now.
“We believe Salesforce is pursuing a strategic vision of becoming a System of Customer Intelligence, with a uniquely strong CEO duo driving the vision and execution” Zukin said in his Aug. 23 report. “With little meaningful competition, pricing pressure or evidence of market saturation, we view current valuation as a buying opportunity.”
He hiked his CRM price target from $181 to $200, suggesting 30% upside lies ahead. Bear in mind, this is one of the Top 25 analysts tracked by TipRanks (out of over 5,200) adding weight to the call.
Overall, 29 out of 30 analysts rate CRM a buy, with the hold rating already almost three months old. Salesforce posted a strong quarter, with beats across major metrics including revenue and operating cash flow despite both year-over-year and quarter-over-quarter currency headwinds. For example, total revenue of almost $4 billion grew 21.8% year-over-year and came in $52 million (1.3%) ahead of the midpoint of guidance.
Microsoft (NASDAQ:MSFT) is often accused of being “boring.” I’m fine with “boring” if it delivers returns. Year-to-date Microsoft has rewarded investors with a 38% sprint. And it remains one of the Street’s favorite Dow Jones Industrial Average stocks. Overall, in the last three months, MSFT has stacked up 22 buy ratings, one hold rating and one one sell rating.
On Aug. 23, Credit Suisse analyst Brad Zelnick reaffirmed his bullish take on MSFT. He also reiterated his price target of $155. The Top-100 analyst notes a slew of positive developments for investors to keep tabs on. One example: Microsoft has just announced the acquisition of jClarity, the leading contributor to the AdoptOpenJDK project.
“The acquisition will help boost Microsoft’s efforts to optimize Java workloads on Azure,” Zelnick said.
Meanwhile, KeyBanc’s Brent Bracelin calls MSFT one of 2019’s top cloud plays and estimates that commercial cloud revenue could reach $100 billion in 2023, up from $44 billion today.
Boston Scientific (BSX)
Hedge funds are busy rotating out of tech stocks and into the healthcare sector. Indeed, Goldman Sachs (NYSE:GS) has now revealed that healthcare has become the biggest sector exposure for hedge funds at 18% by the end of the second quarter. And if you are looking to follow suit, you could do a lot worse than “Strong Buy” stock Boston Scientific (NYSE:BSX). This medical device maker specializes in interventional devices. It manufactures everything from pacemakers to catheters.
Shares are currently up 18% year-to-date and analysts see a further 15% upside potential ahead. That’s on top of 14 recent buy ratings vs just one hold rating. Needham’s Mike Matson has just boosted his price target from $46 to $53, citing the savvy deal for United Kingdom device maker BTG.
“BSX has closed its ~$4B acquisition of BTG. … Over the longer-term, we think that the BTG deal has the potential to be accretive to BSX’s revenue growth and margins and note that the long-term targets BSX set at its 6/26/19 investor day did not include BTG. We have raised our estimates and price target and reiterate our Strong Buy rating,” Matson said in an Aug. 19 note.
Given the later-than-expected closing, BSX now expects the deal to be neutral to its 2019 earnings per share and to be $0.04-$0.05 accretive to its 2020 EPS.
TipRanks offers investors the latest insight into eight different sectors by tracking the activity of over 5,000 Wall Street analysts. As of this writing, Harriet Lefton did not hold a position in any of the aforementioned securities.