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In a world of meme stocks, high-flying AI companies, and crypto, there is always room for steady-moving stocks in one’s portfolio. While stable stocks may not provide the same adrenaline rush or returns, they can be more predictable, easier to hold, and balance a portfolio. Below are 3 steady movers to own now:
TransDigm Group
Pull up a long-term TransDigm Group ((TDG - Free Report) ) chart and you will see why it made the list. Aside from the Global Financial Crisis of 2008 and the Covid-19-induced correction of 2020, the stock has been treating investors to a steady climb for more than 15 years.
Image Source: Zacks Investment Research
Transdigm Group, which earns the best possible Zacks Rank #1 (Strong Buy), is a leading global designer, producer, and supplier of aerospace components used in military and commercial aircraft.
Defense
If we’ve learned anything over the past couple of decades, it’s that defense spending will continue to increase, regardless of which political party holds the White House. For example, President Joe Biden’s Pentagon budget has $842 billion set aside, a 3.2% increase versus already high numbers. Because Transdigm is a leader in this space, it should continue to benefit.
Commercial
Though air travel plummeted during the peak of the COVID-19 pandemic, recent data shows that air traffic is on its way back. Air travel is expected to exceed pre-COVID-19 highs as people take advantage of remote work and the ability to travel again.
Robust Estimates
Zacks Consensus Estimates suggest that earnings will grow 30% year-over-year over the next three quarters.
Image Source: Zacks Investment Research
Furthermore, though analyst estimates are robust, TDG will likely eclipse them. TDG has delivered positive earnings surprises in five straight quarters.
Image Source: Zacks Investment Research
Wednesday, shares broke out to fresh all-time highs.
JP Morgan
New York-based JP Morgan ((JPM - Free Report) ) is the largest bank in the United States and is getting bigger. After First Republic Bank’s (FRC) bankruptcy, JPM won a bid to buy First Republic’s assets from the FDIC for more than $10 billion.
How Steady is JPM?
While banks such as FRC, Signature Bank of New York (SBNY), and Silicon Valley Bank (SBNY) failed, JPM’s debt-to-equity ratio fell to multi-year lows.
Relative Strength
Throughout the thick of the banking crisis of early 2023, JPM shares held the 200-day moving average while the Financial Select Sector SPDR ETF ((XLF - Free Report) ) and the Regional Bank ETF ((KRE - Free Report) ) tanked below it and lagged. Now that the worst of the crisis seems to have blown over, JPM shares are hovering near 52-week highs and are threatening to break out of a multi-month base structure.
Image Source: Zacks Investment Research
McDonald’s
Since the 1950s, Zacks Rank #2 (Buy) McDonald’s ((MCD - Free Report) ) has been the leading fast-food chain in the world. Like Transdigm, MCD has been trending higher for decades with few interruptions.
Image Source: Zacks Investment Research
Low Beta
One measure of the steadiness of a stock is its beta. Beta is a measure of risk commonly used to compare the volatility of a stock to that of the S&P 500 Index. McDonald’s beta of 0.64 means the stock is less volatile than the general market.
Loyalty Program & Focus on Delivery
Though McDonald’s has been selling fast food successfully for decades, the company has two strong catalysts that could drive shares higher over the coming years. First, its loyalty program has transformed its offerings across drive-through, takeaway, delivery, and dine-in. Because of the loyalty program, digital sales have shot higher by more than 30% year-over-year. Second, MCD has inked strategic partnerships with delivery juggernauts like Uber ((UBER - Free Report) ) and DoorDash ((DASH - Free Report) ) to drive delivery revenue.
Strong Earnings History & Estimates
Since 2020, MCD has grown earnings per share each year. Analysts anticipate that this trend will continue into 2024 and beyond.
Image Source: Zacks Investment Research
Bottom Line
Successful investing is more than just looking for the next hot stock. Good trading is often boring, yet profitable. The three stocks above offer strong balance sheets, growth and steadiness and are great counterbalances to a high-octane portfolio.
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3 Stable Stocks to Own Now
In a world of meme stocks, high-flying AI companies, and crypto, there is always room for steady-moving stocks in one’s portfolio. While stable stocks may not provide the same adrenaline rush or returns, they can be more predictable, easier to hold, and balance a portfolio. Below are 3 steady movers to own now:
TransDigm Group
Pull up a long-term TransDigm Group ((TDG - Free Report) ) chart and you will see why it made the list. Aside from the Global Financial Crisis of 2008 and the Covid-19-induced correction of 2020, the stock has been treating investors to a steady climb for more than 15 years.
Image Source: Zacks Investment Research
Transdigm Group, which earns the best possible Zacks Rank #1 (Strong Buy), is a leading global designer, producer, and supplier of aerospace components used in military and commercial aircraft.
Defense
If we’ve learned anything over the past couple of decades, it’s that defense spending will continue to increase, regardless of which political party holds the White House. For example, President Joe Biden’s Pentagon budget has $842 billion set aside, a 3.2% increase versus already high numbers. Because Transdigm is a leader in this space, it should continue to benefit.
Commercial
Though air travel plummeted during the peak of the COVID-19 pandemic, recent data shows that air traffic is on its way back. Air travel is expected to exceed pre-COVID-19 highs as people take advantage of remote work and the ability to travel again.
Robust Estimates
Zacks Consensus Estimates suggest that earnings will grow 30% year-over-year over the next three quarters.
Image Source: Zacks Investment Research
Furthermore, though analyst estimates are robust, TDG will likely eclipse them. TDG has delivered positive earnings surprises in five straight quarters.
Image Source: Zacks Investment Research
Wednesday, shares broke out to fresh all-time highs.
JP Morgan
New York-based JP Morgan ((JPM - Free Report) ) is the largest bank in the United States and is getting bigger. After First Republic Bank’s (FRC) bankruptcy, JPM won a bid to buy First Republic’s assets from the FDIC for more than $10 billion.
How Steady is JPM?
While banks such as FRC, Signature Bank of New York (SBNY), and Silicon Valley Bank (SBNY) failed, JPM’s debt-to-equity ratio fell to multi-year lows.
Relative Strength
Throughout the thick of the banking crisis of early 2023, JPM shares held the 200-day moving average while the Financial Select Sector SPDR ETF ((XLF - Free Report) ) and the Regional Bank ETF ((KRE - Free Report) ) tanked below it and lagged. Now that the worst of the crisis seems to have blown over, JPM shares are hovering near 52-week highs and are threatening to break out of a multi-month base structure.
Image Source: Zacks Investment Research
McDonald’s
Since the 1950s, Zacks Rank #2 (Buy) McDonald’s ((MCD - Free Report) ) has been the leading fast-food chain in the world. Like Transdigm, MCD has been trending higher for decades with few interruptions.
Image Source: Zacks Investment Research
Low Beta
One measure of the steadiness of a stock is its beta. Beta is a measure of risk commonly used to compare the volatility of a stock to that of the S&P 500 Index. McDonald’s beta of 0.64 means the stock is less volatile than the general market.
Loyalty Program & Focus on Delivery
Though McDonald’s has been selling fast food successfully for decades, the company has two strong catalysts that could drive shares higher over the coming years. First, its loyalty program has transformed its offerings across drive-through, takeaway, delivery, and dine-in. Because of the loyalty program, digital sales have shot higher by more than 30% year-over-year. Second, MCD has inked strategic partnerships with delivery juggernauts like Uber ((UBER - Free Report) ) and DoorDash ((DASH - Free Report) ) to drive delivery revenue.
Strong Earnings History & Estimates
Since 2020, MCD has grown earnings per share each year. Analysts anticipate that this trend will continue into 2024 and beyond.
Image Source: Zacks Investment Research
Bottom Line
Successful investing is more than just looking for the next hot stock. Good trading is often boring, yet profitable. The three stocks above offer strong balance sheets, growth and steadiness and are great counterbalances to a high-octane portfolio.