In this article, we will look at the 5 best money-making stocks to buy now. If you want to explore similar stocks, you can read 11 Best Money-Making Stocks To Buy Now.
5. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 27
Wall Street is positive on Vale S.A. (NYSE:VALE). On September 12, RBC Capital analyst Tyler Broda raised his price target on Vale S.A. (NYSE:VALE) and upgraded the stock to Outperform from Sector Perform. This October, Deutsche Bank analyst Liam Fitzpatrick revised his price target on Vale S.A. (NYSE:VALE) to $19 from $20 and reiterated a Hold rating on the shares.
Vale S.A. (NYSE:VALE) is one of the best money-making stocks to buy now. The company has free cash flows of over R$11.72 billion and a trailing twelve-month ROE of 50.59%. The stock has pulled back and is giving investors an opportunity to rack up shares while it still trades at an attractive valuation. As of October 19, Vale S.A. (NYSE:VALE) is trading at PE multiple of 3x and is awarding shareholders with a forward dividend yield of 10.35%.
At the end of Q2 2022, 27 hedge funds were bullish on Vale S.A. (NYSE:VALE) and held stakes worth $1.78 billion in the company. As of June 30, Fisher Asset Management is the top shareholder in Vale S.A. (NYSE:VALE) and has stakes worth $324.5 million in the company.
Here is what GMO LLC had to say about Vale S.A. (NYSE:VALE) in its first-quarter 2022 investor letter:
“Let’s look at Vale (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”
4. Energy Transfer L.P. (NYSE:ET)
Number of Hedge Fund Holders: 36
Energy Transfer L.P. (NYSE:ET) is undervalued and is offering a strong dividend yield. The stock has a trailing twelve-month PE ratio of 9.43 and is offering a forward dividend yield of 7.80%, as of October 19. The company has free cash flows of $5.87 billion and is up 36.39% for the year, as of October 19. Energy Transfer L.P. (NYSE:ET) is ranked high among the best money-making stocks to buy now.
On September 12, the executive chairman of Energy Transfer L.P. (NYSE:ET), Kelcy Warren, disclosed the purchase of roughly 2.42 million shares of the company’s common stock. On October 19, Morgan Stanley analyst Robert Kad raised his price target on Energy Transfer L.P. (NYSE:EP) to $17 from $15 and reiterated an Overweight rating on the shares.
At the close of Q2 2022, Energy Transfer L.P. (NYSE:ET) was spotted on 36 hedge fund portfolios. The collective stakes of these hedge funds in the company amounted to $598.5 million. As of June 30, Abrams Capital Management is the largest investor in Energy Transfer L.P. (NYSE:ET) and has stakes worth $220.8 million in the company.
3. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 42
Lumen Technologies, Inc. (NYSE:LUMN) is a leading American telecommunications company that provides communications, network services, security solutions, and cloud solutions among other services. At the end of Q2 2022, 42 hedge funds were long Lumen Technologies, Inc. (NYSE:LUMN) and held stakes worth $1.02 billion in the company. This is compared to 30 positions in the previous quarter with stakes worth $904.85 million. The hedge fund sentiment for the stock is positive.
Shares of Lumen Technologies, Inc. (NYSE:LUMN) have pulled back in 2022 and are now presenting an attractive buying opportunity for investors. As of October 19, the stock has a trailing twelve-month PE ratio of 3.65 and is awarding shareholders with a forward dividend yield of 14.12%. Lumen Technologies, Inc. (NYSE:LUMN) has free cash flows of over $3 billion and is one of the best money-making stocks to buy now.
This October, Citi analyst Michael Rollins revised his price target on Lumen Technologies, Inc. (NYSE:LUMN) to $8 from $11 and reiterated a Neutral rating on the shares.
As of June 30, Knoll Capital Management is the most prominent investor in Lumen Technologies, Inc. (NYSE:LUMN) and has stakes worth $1.09 million in the company.
Here is what Longleaf Partners had to say about Lumen Technologies, Inc. (NYSE:LUMN) in its third-quarter 2022 investor letter:
“Lumen Technologies, Inc. (NYSE:LUMN) – Global fiber company Lumen was the top detractor in the quarter. In September, the company announced a new CEO, Kate Johnson, would take over for Jeff Storey. Johnson has a strong track record of delivering organic revenue growth, the primary area where Lumen has struggled. Johnson held previous roles at GE and Microsoft, where she most recently served as head of Microsoft US and doubled her division’s revenue in only four years. Multiple checks through our network vouch for her and suggest this leadership change is a positive upgrade that will bring the discipline and focus on sales that Lumen has been missing. The market reacted negatively with concern over the potential for another dividend cut or strategy change. We are confident the stock price reaction is highly overblown versus any impact that a potential dividend cut would have on value per share. The stock now trades at 4.5x EBITDA, and we believe the best value accretive capital allocation move today is share repurchase. Shortly after quarter end, Lumen closed on the sale of part of its consumer business to Apollo, further improving its balance sheet and business mix.”
2. Pioneer Natural Resources Company (NYSE:PXD)
Number of Hedge Fund Holders: 56
Pioneer Natural Resources Company (NYSE:PXD) has free cash flows of more than $6 billion and has a trailing twelve-month ROE of 26.6%. As of October 19, the stock is trading at a PE multiple of 9x and is up 34% for the year. Pioneer Natural Resources Company (NYSE:PXD) also pays dividends and is among the best money-making stocks to buy now. The stock is offering a forward dividend yield of 8.32% as of October 19.
Wall Street is bullish on Pioneer Natural Resources Company (NYSE:PXD). This September, KeyBanc analyst Tim Rezvan took coverage of Pioneer Natural Resources Company (NYSE:PXD) with an Overweight rating and a $290 price target. On October 18, Piper Sandler analyst Mark Lear raised his price target on Pioneer Natural Resources Company (NYSE:PXD) to $346 from $311 and reiterated an Overweight rating on the shares.
At the end of Q2 2022, Pioneer Natural Resources Company (NYSE:PXD) was a part of 56 hedge fund portfolios. The total stakes of these hedge funds amounted to $696.13 million. As of June 30, Abrams Bison Investments is the top investor in Pioneer Natural Resources Company (NYSE:PXD) and has stakes worth $133.40 million in the company.
1. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 57
At the close of Q2 2022, 57 hedge funds disclosed ownership of stakes in Devon Energy Corporation (NYSE:DVN). The total value of these stakes amounted to $1.48 billion. As of June 30, GQG Partners is the leading shareholder in Devon Energy Corporation (NYSE:DVN) and has stakes worth $822 million in the company.
Devon Energy Corporation (NYSE:DVN) is profitable, cash-rich, and paying a strong dividend. The stock is ranked high among the best money-making stocks to buy now. As of October 19, Devon Energy Corporation (NYSE:DVN) has gained 57.87% year to date and is offering a forward dividend yield of 8.89%. The company has a trailing twelve-month operating margin of 38.37% and has free cash flows of over $5.51 billion.
Wall Street sees material upside to Devon Energy Corporation (NYSE:DVN). This September, Citi analyst Scott Gruber raised his price target on Devon Energy Corporation (NYSE:DVN) to $77 from $62 and reiterated a Buy rating on the shares. On October 18, Piper Sandler analyst Mark Lear raised his price target on Devon Energy Corporation (NYSE:DVN) to $96 from $94 and maintained an Overweight rating on the shares.
Here is what GoodHaven Capital Management had to say about Devon Energy Corporation (NYSE:DVN) in its second-quarter 2022 investor letter:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had a material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is mostly variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
You can also take a look at 11 Best Nanocap Stocks To Invest In and 11 Best Dividend Stocks To Buy According To Warren Buffett.
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