While Elon Musk continues playing with Dogecoin (CCC:DOGE-USD), investors continue to lose money.
Down 14% over the past seven days, it’s clear that cryptocurrencies including DOGE-USD are in for one heck of a bear market.
When will it end? Who knows.
For those who merely want to make money from their investments, here are three stocks to buy whose market capitalizations are about the same as Dogecoin’s $26-billion valuation:
These Dogecoin alternatives are the kind of substitution your portfolio will thank you for.
As Dogecoin continues to take on water, investors are sacrificing significant economic opportunities to search for cryptocurrency riches. As The Motley Fool’s David Jagielski pointed out July 13, over the previous month of June, the S&P 500 outperformed Dogecoin by 36% on a relative basis.
How has ViacomCBS (NASDAQ:VIAC) done over the past month? It hasn’t done nearly as well as the index, basically flat over the past 30 days. However, over the past year, it’s notched a total return of 83.6%, approximately double the index.
InvestorPlace’s Mark Hake recently suggested that ViacomCBS would move significantly higher as its free cash flow (FCF) continues to grow.
And as far as I’m concerned, he’s 100% on the money.
ViacomCBS currently has a trailing 12-month (TTM) FCF of $3.33 billion. Its current market cap of $27.6 billion has an FCF yield of 12%. I consider anything over 8% to be value territory.
However, as Hake suggests, if it hits a fiscal 2021 FCF of $6.36 billion, we’re talking about an off-the-charts FCF yield of 23%.
Recent speculation that the company might be a takeover target appears to be growing. The spinoff of WarnerMedia by AT&T (NYSE:T) and its subsequent merger with Discovery (NASDAQ:DISCA, NASDAQ:DISCK) highlights how the consolidation play remains alive and well.
As a result, the downside bet on VIAC is much safer than DOGE-USD.
Interactive Brokers (IBKR)
This online broker recently made waves when it announced that it would be dropping its monthly $20 inactivity fee for customers who didn’t have $2,000 in their trading account or generated less than $20 in commissions. Already one of the lowest-cost online brokers, dropping that fee makes Interactive Brokers (NASDAQ:IBKR) ultra-competitive.
I’m attracted to the company for a couple of reasons.
First, IBKR is a founder-led company. Thomas Peterffy, currently Chairman, founded the company in 1993. He currently holds 70% of the company’s stock. He takes no cash bonus or receives any long-term stock incentives. He believes his ownership position is motivation enough.
At the end of the first quarter, Interactive Brokers had net cash of $2.4 billion and its capital position was $6.7 billion above the regulatory requirement. The company’s services provide investors with access to 135 markets in 33 countries and 25 currencies.
At the end of March, IBKR had 1.33 million client accounts worth $331 billion in value. A lot of that has to do with the fact that it provides investors with some of the industry’s best fees and margin rates.
Plus, based on a TTM FCF of $6.54 billion and a market cap of $26.8 billion, Interactive Brokers has an FCF yield of 24.4%.
Best Buy (BBY)
Raymond James analyst Bobby Griffin noted at the end of June that Best Buy (NYSE:BBY) wasn’t offering nearly as attractive discounts to its customers compared to a year earlier (during the pandemic). That’s a sign this electronics retailer isn’t hurting for business.
At the end of May, Best Buy reported strong results including a 36% increase in sales and earnings per share of $2.23, 60% higher than analyst estimates of $1.39.
Same-store sales, a key performance metric, rose 37.2% during the quarter, well ahead of the 22.4% consensus estimate.
As a result of its strong first quarter, the company raised its same-store sales growth expectations for the year from a decline of 0.5% to a 4.5% increase at the midpoint of its guidance.
For the trailing 12 months, Best Buy had an FCF of $3.51 billion. That makes for an FCF yield of 12.7% based on a $27.6 billion market cap.
Over the past five years, BBY generated an annualized total return of 30.6%, almost double the entire U.S. market. Unlike Dogecoin, owning Best Buy will allow you to sleep at night.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.