In this article, we discuss the 10 best money-making stocks to buy now.
The past year reflected significant revisions in assumptions about the pandemic’s duration and its repercussions on consumers and companies. The uncertainty led to many seeking passive sources of income. According to McKinsey, numerous major corporations opt to return unneeded cash to shareholders on a regular basis, with share repurchases used to make up the gap between the total payout and dividends. While some businesses don’t have explicit published policies in place, you may infer them from their actions. For example, IBM earned $48 billion in cash flow from operations after capital expenditures and acquisitions in the five years ending in 2010 and returned $56 billion to shareholders.
Firms have conditioned investors, particularly in the United States, to expect dividend cuts only in the most severe of circumstances. Only 5% of US-listed firms with revenues higher than $500 million decreased their dividend between 2004 and 2008, and practically all of them were in the midst of a severe recession. For mainstream asset managers, private markets ranked as the strongest dealmaking sector in 2021, as they tried to capitalize on the appeal of growth strategies among yield-seeking investors while raising longer-dated capital with higher fees than public markets strategies.
Day trading has reached unprecedented heights as a result of the inflow of ordinary investors into the market. With the recent example of a short squeeze of GameStop Corp. (NYSE:GME), it is evident that individuals are seeking to make fortunes out of increased volatility. Keeping in view these circumstances, some of the popular money-making stocks to buy now include Equitable Holdings, Inc. (NYSE:EQH), The AES Corporation (NYSE:AES), and Medtronic plc (NYSE:MDT).
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Our Methodology
The stocks mentioned in this article offer decent dividends as well as potential long-term stock price appreciation.
Business fundamentals, analyst ratings, and growth catalysts were among the key indicators used to pick these stocks. The stocks have further been sorted in ascending order in terms of the hedge funds invested in them. The hedge fund sentiment is based on the 867 hedge funds being tracked by Insider Monkey as of Q3 2021.
10 Best Money-Making Stocks to Buy Now
10. Yamana Gold Inc. (NYSE:AUY)
Number of Hedge Funds: 15
Total Value of Hedge Fund Holdings: $127,105,000
1-Year Forward Dividend Yield: 2.93%
Yamana Gold Inc. (NYSE:AUY) owns and operates copper, silver, and gold mines in Argentina, Brazil, Canada, Chile. On October 28, the precious metal producing company announced a quarterly dividend of 3 cents per share for the fourth quarter of 2021. Shareholders holding the stock on December 31, 2021, will be eligible for the dividend and receive the payment by January 14, 2021.
On December 6, Yamana Gold Inc. (NYSE:AUY) announced that it had received permission to increase its output by 10,000 tonnes per day (TPD) at its Jacobina mine. The company intends to increase the output to 8,500 TPD by Q2 2022.
Michael Jalonen at BofA upgraded Yamana Gold Inc. (NYSE:AUY) from a Neutral to a Buy rating with a price target of $6 in a note issued to investors on November 22. The target price provides an upside of over 45% from the prevalent stock price on the New York Stock Exchange (NYSE) as of December 29. Jalonen cited the change in stance towards bullish sentiments on gold as the reason for upgrading Yamana Gold Inc. (NYSE:AUY) stock. The analyst thinks that strong commodity prices will aid Yamana Gold Inc. (NYSE:AUY) in generating healthy cash flows that can be directed towards financing projects under development, boosting returns of shareholders through dividends and share repurchase, and strengthening the balance by reducing debt.
In addition to Yamana Gold Inc. (NYSE:AUY), some of the popular money-making stocks as of Q3 include Equitable Holdings, Inc. (NYSE:EQH), The AES Corporation (NYSE:AES), and Medtronic plc (NYSE:MDT).
9. Medifast, Inc. (NYSE:MED)
Number of Hedge Funds: 20
Total Value of Hedge Fund Holdings: $251,410,000
1-Year Forward Dividend Yield: 2.74%
Medifast, Inc. (NYSE:MED) is a Baltimore, Maryland-based nutrition and weight-loss organization, serving customers through several formulas like the Medifast, OPTAVIA, Thrive by Medifast, etc. The corporation is involved in the production, distribution, and selling of health and weight-loss-related products through various marketing mediums like multi-level marketing, telemarketing, etc.
The entity released its Q3 2021 results on November 4 and outperformed revenue and EPS estimates. Medifast, Inc. (NYSE:MED) reported revenue and EPS of $413 million and $3.56, respectively, compared to the consensus estimate of $403.76 million and $3.08. For FY21, the company forecasted revenue of $1.51 billion to $1.53 billion, which was in line with the consensus estimate of $1.52 billion.
Following the quarterly results, Linda Weiser at DA Davidson reiterated a Buy rating on Medifast, Inc. (NYSE:MED) stock and gave a price target of $349 in a research note issued on November 8. The analyst appreciated the strong Q3 2021 results outperforming the consensus estimates but also highlighted that FY21 guidance was only raised by 18 cents to incorporate the impact of infrastructure spending.
8. Snap-on Incorporated (NYSE:SNA)
Number of Hedge Funds: 29
Total Value of Hedge Fund Holdings: $551,227,000
1-Year Forward Dividend Yield: 2.73%
Snap-on Incorporated (NYSE:SNA) is a designer, manufacturer, and seller of high-end equipment and tools for professional use in numerous industries like automotive, aviation, and railroad industries. The Kenosha, Wisconsin-based entity has paid consecutive quarterly dividends since 1939. Snap-on Incorporated (NYSE:SNA) has more than 80,000 SKUs in its offering and employs 12,500 workers globally. The company caters to its customers through 3,400 franchise vans in the US and 4,800 mobile stores globally.
On November 4, Snap-on Incorporated (NYSE:SNA) announced a Q4 dividend per share of $1.42, reflecting an increase of 15.4% from the previous quarter. The company also disclosed a share buyback plan of $500 million, besides the remaining $194 million authorized share buyback. All these efforts reflect the company’s intent to create long-term value for its shareholders.
In a report issued on October 29, Ivan Feinseth at Tigress Financial increased the price target on Snap-on Incorporated (NYSE:SNA) from $289 to $295 while maintaining a Buy rating on the stock following the company’s strong Q3 2021 results. Snap-on Incorporated (NYSE:SNA) is likely to benefit from the massive shift towards manufacturing electric and self-driving vehicles by auto giants like the Ford Motor Company (NYSE:F) and the General Motors Company (NYSE:GM), as this will result in an increased demand for specialty tools.
7. Best Buy Co., Inc. (NYSE:BBY)
Number of Hedge Funds: 29
Total Value of Hedge Fund Holdings: $679,878,000
1-Year Forward Dividend Yield: 2.88%
Best Buy Co., Inc. (NYSE:BBY) is a consumer electronics retailer with 1,000 stores across the US and Canada, employing 100,000 people. The Richfield, Minnesota-based corporation also sells a wide range of related merchandise such as digital cameras, software, and video games along with home appliances like TV, refrigerators, and washing machines.
On November 24, Best Buy Co., Inc. (NYSE:BBY) announced a Q4 dividend per share of 70 cents that will be paid out on January 4, 2022, to all those shareholders that held the stock at the close of trading on December 14.
On December 6, Scott Mushkin at R5 Capital upgraded Best Buy Co., Inc. (NYSE:BBY) from a Hold to a Buy rating with a target price of $140, representing a potential upside of over 42% from the stock price as of December 29. The analyst expects multiple catalysts in the next year or two for the organization that can help grow its top line for many years to come.
Best Buy Co., Inc. (NYSE:BBY) is working on making its store base efficient. The introduction of the new Totaltech membership is expected to positively impact every category in the store. Mushkin thinks that as the initiatives will start rolling out, it will put Best Buy Co., Inc. (NYSE:BBY) in a unique position to grow its market share in the long run.
6. Cummins Inc. (NYSE:CMI)
Number of Hedge Funds: 30
Total Value of Hedge Fund Holdings: $830,044,000
1-Year Forward Dividend Yield: 2.75%
Cummins Inc. (NYSE:CMI) is a designer, manufacturer, and distributor of diesel and natural gas engines and electric and hybrid powertrains. The Columbus, Indiana-based corporation sells its products in over 190 countries around the world through 600 distributors and 7,200 dealers.
On December 14, Cummins Inc. (NYSE:CMI) revealed a share buyback plan of $2 billion after the completion of a $2 billion share buyback plan already in action since its commencement in 2019. On December 2, Cummins Inc. (NYSE:CMI) paid a Q4 dividend of $1.45 per share to all the shareholders on record on November 19.
Nicole DeBlase at Deutsche Bank reiterated a Buy rating with a price target of $247 on Cummins Inc. (NYSE:CMI) stock in a research note issued on December 10. The analyst expects the severity of challenges related to the supply chain and headwinds related to price and costs to fall in the second half of 2022. Furthermore, Nicole anticipates clarity and improvement in the macroeconomic environment once the omicron variant of COVID-19 subsides, inflation is controlled, and interest rate increase takes place.
Apart from Cummins Inc. (NYSE:CMI), Equitable Holdings, Inc. (NYSE:EQH), and the AES Corporation (NYSE:AES), Medtronic plc (NYSE:MDT) are also attracting hedge fund investment as of Q3 2021.
5. Equitable Holdings, Inc. (NYSE:EQH)
Number of Hedge Funds: 46
Total Value of Hedge Fund Holdings: $1,704,423,000
1-Year Forward Dividend Yield: 2.25%
Equitable Holdings, Inc. (NYSE:EQH) is a financial services and insurance company based out of New York. The company has over 12,000 employees and assets under management of over $871 billion through its five million customers around the world. Equitable Holdings, Inc. (NYSE:EQH) announced a Q4 dividend per share of 18 cents that is payable on December 6 to all the shareholders on record until the close of trading on November 29.
In a research note issued on December 2, Alex Scott at Goldman Sachs initiated coverage on Equitable Holdings, Inc. (NYSE:EQH) with a Conviction Buy rating and a target price of $52. This provides investors an opportunity to realize a potential upside of over 66% from the prevailing stock price as of December 29. Equitable Holdings, Inc. (NYSE:EQH) has been increasing its annual dividend for three consecutive years.
The analyst foresees the company’s net investment income reallocation and reduction in expenses to play in its favor. Scott also thinks that in the past few years, Equitable Holdings, Inc. (NYSE:EQH) has made the right decisions related to risk management that will put it in a better position to face the changing accounting practices and regulatory environment as opposed to its competitors.
4. The AES Corporation (NYSE:AES)
Number of Hedge Funds: 47
Total Value of Hedge Fund Holdings: $1,481,369,000
1-Year Forward Dividend Yield: 2.68%
The AES Corporation (NYSE:AES) is one of the leading power generation companies in the world with power generation and distribution capacity in more than 15 countries, including the US. The Arlington, Virginia-based company is home to over 10,000 employees.
The Fortune 500 company announced a Q1 FY22 dividend of 15.80 cents per share, an increase of 5% on a sequential basis. The dividend will be paid out on February 15, 2022.
On December 20, the AES Corporation (NYSE:AES) announced the acquisition of Community Energy Solar. This move is expected to increase the AES Corporation’s (NYSE:AES) focus on employing renewable energy sources through the addition of a 10 GW pipeline. The terms of the deal were not disclosed to the public.
On November 29, Insoo Kim at Goldman Sachs initiated coverage on the AES Corporation (NYSE:AES) with a Buy rating and a target price of $30. The analyst expects the renewable energy pipeline to reap benefits for the AES Corporation (NYSE:AES) in the long run.
3. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Funds: 57
Total Value of Hedge Fund Holdings: $2,517,368,000
1-Year Forward Dividend Yield: 2.12%
Ally Financial Inc. (NYSE:ALLY) is a diversified financial services company based out of Detroit, Michigan. The company is one of the largest auto financing providers in the US, with 4.1 million customers entertained by over 10,000 employees.
Ally Financial Inc. (NYSE:ALLY) has over 2.45 million depositors with $139 billion in total deposits and over 503,000 brokerage accounts with a holding of $16.3 billion in assets. On October 6, Ally Financial Inc. (NYSE:ALLY) revealed a quarterly dividend of 25 cents per share to be paid on November 15 to all the shareholders in possession of the stock on November 1.
On December 1, David Long at Raymond James initiated coverage on Ally Financial Inc. (NYSE:ALLY) with a Buy rating and a price target of $55. The analyst is bullish on the outlook of the bank due to the diversification of its business model along with strong growth in customers. Long also anticipates an expansion in net interest margin (NIM) due to an increase in asset yields and optimization of Ally Financial Inc.’s (NYSE:ALLY) liabilities.
2. Medtronic plc (NYSE:MDT)
Number of Hedge Funds: 62
Total Value of Hedge Fund Holdings: 2,278,950,000
1-Year Forward Dividend Yield: 2.45%
Medtronic plc (NYSE:MDT) is an Irish-American healthcare technology corporation involved in the manufacturing and selling of medical devices. The Dublin, Ireland-based company is the biggest medical devices company globally in terms of the top line.
The devices and services provided by Medtronic plc (NYSE:MDT) aid in the treatment of over 70 health conditions. The entity divides its equipment into four portfolios, namely cardiovascular, diabetes, medical-surgical, and neuroscience.
Medtronic plc (NYSE:MDT) announced a dividend of 63 cents per share on December 9 for the third quarter of 2021. The dividend will be paid out on January 22, 2022, to all shareholders who held the stock at the close of trading on December 21. Medtronic plc (NYSE:MDT) is a part of the prestigious Dividend Aristocrat List as it has been increasing its dividend for the last 44 consecutive years.
In a research note highlighting the outlook for the medical devices’ industry for 2022, David Rescott at Truist gave Medtronic plc (NYSE:MDT) a Buy rating with a price target of $124 on December 21. Rescott arrived at the price target after incorporating the impacts of the headwinds expected to be faced by the Diabetes division following the warning letter from the Food and Drug Administration (FDA) in mid-December.
1. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Funds: 75
Total Value of Hedge Fund Holdings: $8,547,154,000
1-Year Forward Dividend Yield: 2.04%
Comcast Corporation (NASDAQ:CMCSA) is the second biggest broadcasting and cable television organization globally. The Philadelphia, Pennsylvania-based company also happens to be the biggest broadband residential internet service provider in the US and the third biggest home TV service provider.
Comcast Corporation (NASDAQ:CMCSA) declared a quarterly dividend of 25 cents per share on October 28 for the fourth quarter of 2021, payable on January 26, 2022. The company has been increasing its dividends for the last four years.
In the past five years, Comcast Corporation (NASDAQ:CMCSA) has progressed through strong acquisitions. In August 2016, the company completed the takeover of DreamWorks Animation for $3.8 billion. Similarly, in 2018, Comcast Corporation (NASDAQ:CMCSA) acquired Sky plc for nearly $39 billion after outbidding 21st Century Fox, which held a 39% stake in Sky.
On December 15, Jeffrey Wlodarczak at Pivotal Research issued a Buy rating on Comcast Corporation (NASDAQ:CMCSA) stock with a price target of $62. The price target reflects a potential upside of nearly 24%. The analyst highlighted the favorable stock valuations as an investment opportunity for investors with patience. Wlodarczak also addressed concerns related to the cut in data subscriber growth guidance related to the company’s core broadband business by adjusting his estimates.
You can also take a peek at the 10 Best Tech Stocks to Buy Now and 10 Best Stocks to Buy for the Next 10 Years.
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Disclose. None. 10 Best Money-Making Stocks to Buy Now is originally published on Insider Monkey.
