It’s been a tough 12 to 18 months for investors. The market roared higher into the end of 2021, stumbled big time in 2022, and had a strong start to 2023. Despite what many investors may have expected just a few months ago, we have a handful of all-time high stocks to buy. Some investors prefer momentum, others like value. Given that it generally takes a strong trend for shares to hit new highs, it’s not surprising that there are momentum stocks hitting all-time highs.
However, many names hitting these highs are not considered traditional momentum stocks — i.e. tech stocks. They certainly aren’t considered growth stocks either. The stock market rally of 2023 is being led higher by just a handful of tech giants (seven to be exact). However, these are also not the stocks that have been hitting new highs.
Let’s look at the best all-time high stocks to buy right now.
All-Time High Stocks to Buy: McDonald’s (MCD)
McDonald’s (NYSE:MCD) has been trading so incredibly well lately, it’s been impossible to ignore. Shares have rallied in seven straight weeks and in 22 of the past 27 sessions. Further, three of those five daily declines were for less than 0.10%.
In other words, this stock has been an absolute monster for the bulls, as shares continue to hit new all-time highs on a seemingly daily basis. The question is, can it continue?
There’s definitely been a sort of flight to safety-trade lately. That’s as defensive stocks and other so-called safe stocks continue to find a healthy amount of buyers. Is McDonald’s stock expensive at 27 times earnings with a dividend yield of “just” 2% right now? It’s not cheap necessarily. And while a pullback could certainly be in order, it’s hard to say that the rally is simply going to end as investors suddenly decide that 27 times is too expensive vs. 25 times earnings or some other arbitrary number.
The fact is, McDonald’s is a cash flow machine with predictable earnings. Investors are willing to pay up for that predictability in this environment.
Eli Lilly (LLY)
About a month ago, there was a strong bid on healthcare stocks. It wasn’t talked about too much, but it was clear that money was rotating out of tech and into defensive names (like McDonald’s) and into healthcare stocks like Eli Lilly (NYSE:LLY). That rotation was clear and it’s what helped set up Eli Lilly stock to power to all-time highs.
Now if investors think McDonald’s is expensive, they may really take issue with Eli Lilly. Shares trade at about 46 times this year’s earnings estimates and just under 34 times next year’s expectations.
But it’s been one of the best all-time high stocks in recent trading. While shares are up just 11% so far in 2023, they’re up almost 40% over the past 12 months. In other words, this year-to-date return leaves room to run on the upside, while the one-year return shows robust outperformance vs. the indices. While the company reported a mixed quarter in late April, it raised its full-year outlook.
Lastly, it’s hard to ignore PepsiCo (NASDAQ:PEP) here. Shares are up just 11.6% over the past year (easily outperforming the indices) but are up just over 6% so far this year.
The stock pays a 2.4% dividend yield and PepsiCo has not only paid that dividend but has raised its annual payout for 50 consecutive years. When it comes to consistency, it’s hard to ask for more than that. In April, PepsiCo delivered a top- and bottom-line beat and raised its growth outlook. Shares aren’t exactly screamingly cheap at 26 times this year’s earnings, but investors are getting some pretty solid growth out of the firm alongside incredible consistency.
Analysts expect roughly 5% revenue growth this year and next year, and 8% to 8.5% earnings growth in 2023 and 2024, respectively.
A bonus pick? Chipotle Mexican Grill (NYSE:CMG) is also impressive here. Although the valuation is significantly higher, so is the growth.
On the date of publication, Bret Kenwell 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.