Do you know what a “washing machine” market looks like? If not, look around, because you’re in one now.
A washing machine market is what I call a stock market that is sloshing prices back and forth without picking up any real momentum. Gains in one S&P 500 sector are swallowed by losses in another. Some days the Dow Jones Industrial Average may be up, but the Nasdaq composite will be down.
A washing machine market can frustrate some, but I enjoy looking for fundamentally superior stocks to get me through the rough patches. I look for stocks with solid dividend yields, strong earnings and sales, and promising guidance.
Because I know that, eventually, those solid stocks will give me returns. And when the water settles in the stock market, odds are my portfolio will be better positioned.
Use the Portfolio Grader to help you find stocks to buy in a washing machine market. These seven are highly rated right now:
Exxon Mobil (XOM)
Even in a washing machine market, it’s hard to go wrong with an outstanding energy stock. And one of my favorites is Exxon Mobil (NYSE:XOM). The global oil and gas conglomerate brought in a record $55.7 billion in profits last year.
In the first quarter of the year, revenue was $84.18 billion, equating to $11.43 million in profits. That gave shareholders a cool $2.83 per share in EPS.
And if you’re looking for yield, look no further than Exxon. It pays a forward dividend yield of 3.5%. Exxon has raised its dividend faithfully for the last 40 years, the yield will continue to reward shareholders.
And here’s an eyebrow-raising development: Exxon is entering the lithium mining business. Lithium is a key component for manufacturing batteries used in electric vehicles and smartphones.
Exxon acquired the drilling rights to 120,0o0 acres in Arkansas to mine for lithium in an apparent bid to prepare for a future when the world isn’t as reliant on fossil fuels.
XOM stock has a “B” rating in the Portfolio Grader.
Visa (NYSE:V) is one of the world’s biggest and best-known payments companies.
With credit cards and pre-paid cards available in more than 200 countries, Visa accounts for roughly 53% of all cards in circulation, according to Forbes.
Visa makes money from assessment fees, which are charged for processing a merchant’s credit card transactions. Sellers are more than willing to let Visa and other credit card companies take a small percentage of the profits for the convenience of allowing customers to purchase with a credit or debit card.
For the first quarter, Visa brought in nearly $8 billion in revenue, an increase of 11% from a year ago. Income of $4.26 billion meant earnings per share of $2.09, which beat analysts’ expectations by 10 cents per share.
Rising prices and inflation, coupled with a relatively low unemployment rate, have more people than ever using their credit cards. Credit card debt continues to be on the rise, which is a trend that bodes well for Visa.
V stock has a “B” rating in the Portfolio Grader.
Eli Lilly (LLY)
Indianapolis-based pharmaceutical company Eli Lilly (NYSE:LLY) made my list of best stocks to buy for May. Now that we’re nearly finished with the month, my mind hasn’t changed.
Eli Lilly has some exciting and potentially lucrative drugs in its pipeline. It includes donanemab, a treatment for Alzheimer’s that could get Food and Drug Administration approval in the next year.
And then there’s tirzepatide, which is sold under the brand name Mounjaro. Lilly currently markets the drug as a treatment for type 2 diabetes, but the FDA is considering its application to be used as a treatment for obesity.
Mounjuro alone is expected to bring in as much as $25 billion in annual revenue if it’s used as an obesity treatment.
LLY stock is up 15% so far this year, but there’s more to come if the FDA comes through. LLY has an “A” rating in the Portfolio Grader.
Enterprise Products Partners (EPD)
Headquartered in Houston, Enterprise Products Partners (NYSE:EPD) provides midstream energy services to producers and consumers of natural gas, natural gas liquids, oil, petrochemicals and refined products.
The best thing about Enterprise Products is that it’s a master limited partnership. The MLP structure means ownership shares are traded publicly like a stock. The corporation pays taxes on earnings before its shares the windfall with investors in the form of dividends.
Energy companies such as EPP use the MLP structure so they can take advantage of tax benefits, such as depreciation and depletion, to reduce taxes on income. Partners often get sizable dividend yields on the tax-advantaged income.
EPD stock currently has a dividend yield of 7.5%. It gets a “B” rating in the Portfolio Grader.
First Citizens BancShares (FCNCA)
If you’ve been following the problems surrounding bank failures this year, then you’ve undoubtedly heard of First Citizens BancShares (NYSE:FCNCA), the holding company for First Citizens Bank.
First Citizens jumped in the spotlight in March when it agreed to buy the assets of the Silicon Valley Bank, which failed earlier this year and raised red flags about many regional bank stocks.
The deal allowed First Citizens to buy $72 billion of Silicon Valley’s assets for $16.5 billion.
The deal has been a massive windfall for FCNCA stock. The bank reported net income of $9.5 billion in the first quarter, up from $264 million in the same quarter a year ago. That made First Citizens the second-most profitable bank in the country in the first quarter, behind only JPMorgan & Chase (NYSE:JPM).
FCNCA stock is up 137% since they announced the deal in March and gets an “A” rating in the Portfolio Grader.
Ruth’s Hospitality (RUTH)
Buying Ruth’s Hospitality (NASDAQ:RUTH) stock right now is possible, but you don’t have too much time left. Ruth’s, the owner of Ruth’s Chris Steak House, is being bought by Darden Restaurants (NYSE:DRI) for $715 million in an all-cash deal.
Darden owns brands like Olive Garden, LongHorn Steakhouse, Yard House, The Capital Grill and Bahama Breeze. It’s betting that it will absorb Ruth’s Chris, a high-end steakhouse, and run it more efficiently.
The deal, announced in early May, values RUTH stock at $21.50 per share. That’s close to where Ruth Hospitality currently trades. But if the washing machine market causes that price to slip, it may be worthwhile to get some shares at a discounted price before the sale goes through later this year.
RUTH stock has a “B” rating in the Portfolio Grader.
Software financial company Intuit (NASDAQ:INTU) is known for its financial and tax preparation products such as QuickBooks and TurboTax.
Both products are popular with users because they are simple to use and designed for a retail customer, not someone who’s an expert in finance or accounting.
The company has invested heavily in artificial intelligence. During the company’s earnings call for the fiscal third quarter of 2023, management disclosed that its platforms, including Mailchimp and Credit Karma, power 58 billion machine learning predictions daily.
AI helps Mailchimp customers develop more effective email marketing campaigns and allows Credit Karma suggest credit strategies and products for users who are monitoring their credit ratings.
Earnings for the quarter were $6.02 billion, up 7% from a year ago despite what management called a challenging tax season. Earnings per share were $8.92, better than the $7.65 posted a year ago.
INTU stock is up 15% in 2023 and gets a “B” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in XOM and V. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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