Longer investing time frames are a major benefit for individual investors. If you can think in years or decades, you can outperform Wall Street pros who focus on the next quarter or year.
Long-term thinking increases your chances of outperforming the market, but you must also own several great enterprises. You should be able to buy these stocks cheaper than peers. This market is harder to identify deals in due to the S&P 500's big surge since early 2023. There are still deals. Here are some of the most attractive ones from early April.
1. Walmart Walmart (NYSE: WMT) is inexpensive. The retailer has an almost $500 billion market cap, making it the biggest player in the business. But it earns almost $500 billion annually. Walmart costs less than 1 times yearly sales, which is somewhat less than Target and far less than Costco
Owning Walmart stock doesn't reduce growth. Strong consumer traffic in the core U.S. market, huge advances in overseas operations, and rising e-commerce demand helped the chain record a 6% Christmas quarter sales bump. "Our team delivered a great quarter," late-February CEO Doug McMillon remarked.
Walmart's maturity means it won't delight shareholders with large stock price gains. The corporation has outperformed forecasts while increasing dividends and stock buybacks. These factors should boost patient investor returns.
2. McDonald's McDonald's (NYSE: MCD) stock is now unpopular. Worries about decreasing growth have kept the fast-food company marginally positive over the past year. Mickey D's was here before. The chain is losing customers in its key U.S. market. As inflation slows, prices are falling.
In a conference call with analysts, management indicated comparable-store sales growth will likely slow to 3% to 4%. McDonald's comps grew 9% last year and 10% in 2022.
However, the world's largest fast-food chain may thrive with slower development. As operational profit margin approaches 50% of sales, earnings should rise by double digits this year. McDonald's generates tremendous cash flow on its sales footprint, so investors may expect additional dividends and stock buybacks in the coming years even if growth slows.
The chain won't accept stalled sales trends. Executives are heavily investing in menu expansion and drive-thru and home-delivery revenues. However, McDonald's stock can yield good returns even during a slow sales period. Patient investors should consider this stock because the leading competitor can satisfy investors in a variety of selling conditions.
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