The best investments in this market offer stability, growth and, in the best situations, a depressed price.
U.S. stocks took another massive haircut after August inflation data rose significantly higher than expected, surprising investors. The market is worried about rising inflationary pressures, that could prompt the Federal Reserve to increase interest rates aggressively.
Nevertheless, several growth, value and income stocks can be picked up at multi-year lows. We’ve picked seven of the best investments with incredible upside potential, trading at attractive prices.
The carnage witnessed at the stock markets this year has been tough to watch. Rising inflation has chomped away at disposable incomes while interest rates crippled equity markets this year.
The pull-back has created multiple opportunities to invest in high-quality businesses with robust fundamentals and remarkable future prospects.
|NHI||National Health Investors||$62.17|
|VNO||Vornado Realty Trust||$26.32|
Chevron (NYSE:CVX) is one of the leading integrated oil and gas giants in the U.S. making it one of the best investments in the energy space.
Its stock has enjoyed a phenomenal run of late on the back of record-high oil prices. Consequently, it’s been posting record quarterly results of late and is poised to continue performing exceedingly well over the next several quarters.
Chevron’s positioning as a leading up and downstream player helps ensure outsized profits. Its profit quadrupled in the latest quarter, with its downstream operations yielding record margins while its upstream assets posted record high profits.
These results have had a meaningful impact on shareholder rewards, with yields up to almost 3.6%, with a record-setting rate of buybacks of $17 billion annually. Moreover, even if oil prices fall to break-even levels, Chevron will continue to maintain its dividend.
National Health Investors (NHI)
National Health Investors (NYSE:NHI) is a real estate investment trust focusing on owning and leasing out income-producing healthcare-related properties, making it one of the best investments in healthcare REITs.
Its portfolio is spread across 32 different states and is located in the more population-dense areas in the U.S.
NHI has seen its fair share of problems as the result of labor shortages and repressed occupancy rates. However, its recent quarterly results suggest that its business is back on track, posting an 8.6% increase in its normalized funds from operation per share.
Also, the firm has been looking to sell off underperforming assets over the past couple of years. In the past 12 months alone, it has disposed of 31 underperforming businesses. With a robust balance sheet and over a 5.5% dividend yield, NHI stands out as one of the top players in the space.
Vornado Realty Trust (VNO)
Vornado Realty Trust (NYSE:VNO) is a top retail and office property REIT focusing on New York making it one of the best investments in urban REITs.
The pandemic led to an exodus of employees from the city, weighing down VNO’s results and its performance at the stock market. However, the past few quarters have shown a healthy increase in revenues and earnings. Add to that its relatively safe dividend, almost an 8% yield, and you have a winner.
Earlier in the year, VNO inked an agreement with a company called Sharebite to provide free food to its tenants in its Manhattan office buildings. It has been renovating an office building in NYC’s Penn District, where it’s providing a wide variety of novel amenities.
VNO is looking to add more value to its properties, sensing the challenge of the work-from-home trend and other areas offering better value for money. However, recent results point to a resurgence.
Alphabet derives the bulk of its sales from advertising, an industry that has recently experienced plenty of headwinds. Naturally, with the erosion of business margins during the current economic crisis, advertising budgets are bound to be reduced. However, the question is whether investor concerns are overblown.
The firm posted a remarkable 13% jump in sales growth during the second quarter. The impressive result demonstrates its strong positioning in the advertising space as many of its peers failed to do well in the quarter.
Moreover, once the economy recovers, Alphabet is likely to return in an emphatic fashion. Nevertheless, the market pull-back has created an excellent buying opportunity, where its stock now trades at multi-year lows.
Chinese EV giant Nio (NYSE:NIO) saw its deliveries cool off in the past couple of months, but it wrapped up another incredible quarter despite the headwinds.
It delivered 25,059 vehicles in the second quarter, up 14.4% from the prior-year period. Moreover, its sales shot up 22% to $1.54 billion making it one of the best investments in the Chinese EV sector.
These results were impressive despite it being forced to shut down manufacturing in April and May. As we advance, it expects a spectacular 31% bump in deliveries in the third quarter, at the midpoint of guidance.
Nio recently released its mid-sized sedan, the ET5, which created a furor in the market. It has already received close to 200,000 pre-orders for the sedan, an incredible feat given the circumstances. However, with investors focusing on profitability, Nio just can’t catch a break.
Nevertheless, it remains an excellent long-term investment in the space.
Tenable (NASDAQ:TENB) has established itself as the go-to service provider for vulnerability management.
Cybersecurity threats have evolved at an alarming pace over the past decade with the proliferation of cloud-based services. The need for proactive cybersecurity tools has become imperative, and industry experts have suggested that cybersecurity spending is shielded in the wake of a recession.
Tenable’s Nessus platform is the top vulnerability management platform used by over 30,000 organizations. Moreover, it also holds the number one spot for coverage against more than 71,000 vulnerabilities, 20% more than its competitors.
The number of high-value clients (spending over $100,000) has grown by double digits in the past three years. Additionally, the firm is eyeing a whopping addressable opportunity worth approximately $25 billion by 2025, pointing to a massive upside ahead.
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) is one of the top names in the aerospace and defense sectors.
Despite the pandemic-related challenges, it’s coming off its best years to date, generating over $65 billion in sales. It boasts incredible brand equity, which has helped it generate massive cash flows and reward stockholders consistently. Its dividend payouts have grown for more than 20 consecutive years.
Its growth rates haven’t been up to snuff in the past few years. However, it’s close to reaching an inflection point of stronger margins and deliveries.
Its order books are likely to improve due to rising defense budgets in the U.S. and abroad. Its primary focus at this time revolves around share buybacks and lowering share count, which should fuel earnings per share growth.
On the date of publication, Muslim Farooque 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