- The Great Resignation has seen numerous people voluntarily leave their jobs. Here are three stocks to buy that offer reliability in unstable times.
- Annaly Capital Management (NLY): A REIT for passive and continuous income generation.
- Alphabet (GOOGL, GOOG): The leading search engine worldwide has all it takes to keep its dominance.
- Apple (AAPL): A top consumer electronics company that is expected to expand to electric vehicles in coming years.
The Great Resignation trend is a phenomenon of people voluntarily resigning from their jobs on a massive scale. It’s an economic trend that began in early 2021 in the U.S., but it has taken hold in other countries such as the U.K., Australia and France.
As CNN Business‘ Julia Horowitz explains, “in 2021, 47.8 million workers in the United States left their jobs voluntarily, the highest number since the Bureau of Labor Statistics started tracking full-year data in 2001.”
The biggest catalyst for this shift in the job market is the pandemic. Other key factors are the rising cost of living, long-lasting job dissatisfaction, low pay, a stagnant environment and other personal and emotional reasons. Lockdowns gave people time to consider their careers and personal development.
This Great Resignation phenomenon is expected to slow down, but a major, permanent change has been established in the work environment. People need flexible, remote work at home.
For investors — including anyone who left their job to become an investor — this means you should be looking for stable stocks to buy that won’t be swayed by these changes and avoiding meme stocks, high-growth tech stocks that trade at irrational financial ratios and stocks that do not have a sustainable economic moat.
Right now, investors should focus on high-quality stocks to buy that offer passive income and minimal risk. The expected returns should be more than enough to compensate for the high inflation rate today.
|NLY||Annaly Capital Management||$6.37|
Annaly Capital Management (NLY)
Annaly Capital Management (NYSE:NLY) is one of the most well-known real estate investment trust (REIT) companies, having the key advantage of not being subject to federal income tax to the degree that it distributes its taxable income to its shareholders. REITs are required to distribute 90% of their taxable earnings in the form of persistent high dividend yields.
REITs are considered to be relatively conservative investments that provide the best of both worlds in the stock market: the potential for capital appreciation and passive income. Shares of Annaly Capital Management offer a quarterly dividend that is very attractive today. NLY stock has a forward dividend and yield of 88 cents and 14% respectively.
The 23-year dividend history for NLY stock is supportive of a strong and persistent passive income generation, as ever since the historic low dividend yield of 3.64% in 2006, the yield has increased and remains mostly above 10% per year.
The average annual return for shares of Annaly Capital Management over the past 10 years is 2.41%, which is good combined with the high dividend yield.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) operates the leading search engine worldwide Google and has a business model with internet-related products and services like online advertising, Google cloud computing, software and hardware and has in its portfolio one of the top-visited websites globally, YouTube.
The rationale for having shares of Alphabet in your portfolio is simple yet powerful. People will always use online search to find content, ideas and suggestions for almost everything, and businesses will use marketing and advertising to sell their products and services to their prospective customers. It is a business that will never go out of demand.
Alphabet has a very strong financial performance, which shows its business model is working fine. Sales growth is consistent and positive, up 41% in 2021. Profitability is also great with earnings per share rising 91% to $112.20 in 2021, and the free cash flow trend is exceptional, up 56% in 2021 to $67 billion.
Shares of Apple (NASDAQ:AAPL) have an average annual return of 25.2% over the past 10 years — if you had invested $1000 in AAPL stock 10 years ago you would now have $9,441. Although there are no guarantees that this phenomenal return for AAPL stock will continue in the future, Apple is a true gem in the U.S. stock market.
Perhaps the company’s most well-known product is the iPhone, which lead the way for modern smartphones today. Apple has high-quality and expensive products with a loyal audience that loves them, and sales have boomed over the past years. In 2021 sales grew 33% to $366 billion and profitability is outstanding, while the firm is a cash flow generation machine.
Apple became the first U.S. company to hit a $1 trillion market cap, and this is no coincidence. Apple has a magic touch in selling its premium products and is the epitome of innovation. Within a few years, the tech company is expected to launch its electric vehicle, which will be a game-changer. We should expect many more innovations and trends set by Apple in the future.
The management of Apple has implemented share buybacks and return of capital to investors via dividends signaling a strong business outlook over time. At the end of 2021, Apple had cash available of $26.91 billion. This allows for seeking acquisitions, exploring new business ideas and supporting the growth of the stock price leaving room for future dividend rate hikes.
On the date of publication, Stavros Georgiadis, CFA 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.