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2 Top Stocks to Buy Now at Big Discounts and Hold for Years

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Today’s episode of Full Court Finance at Zacks explores the stock market after two strong weeks that helped the S&P 500 climb back above its 200-day moving average. The episode then breaks down two stocks from out of favor industries, Lowe's Companies, Inc. (LOW - Free Report) and D.R. Horton, Inc. (DHI - Free Report) , that investors might want to buy at enticing discounts as we head into April.

The market was mostly mixed on Monday, with all three major indexes whipsawing between small declines and gains for much of the session—though the Nasdaq did pop 1% in late-afternoon trading. The more subdued moves to start the final week of March follows the much-welcome comeback over the last two weeks.

The geopolitical unknowns and the continued violence in Ukraine didn’t stop Wall Street from scooping up tons of great stocks at discounts. The S&P 500 is up around 9% compared to where it was on March 14, while the tech-heavy Nasdaq surged nearly 13% despite the ongoing Russian invasion of Ukraine.

The super easy-money days are over and the 10-year U.S. Treasury has popped back to near three-year highs. Higher rates should be a drag on stocks, as they aim to help combat nearly 8% inflation.

Yet even with rates on the rise, they are comparatively low by historical standards. This backdrop could be bullish for stocks as investors try to outpace 40-year high inflation.

Investors looking to buy stocks might decide to focus on names that didn’t benefit from the recent market comeback and are trading at big discounts to their records.

The two stocks we dive into have also suffered recently as the broader housing and home improvement industries are dropped by Wall Street as mortgage rates climb. Both Lowe’s and D.R. Horton also pay dividends, have solid valuations, and are projected to grow for years to come.

Lowe's Companies (LOW - Free Report) is a home improvement giant. Lowe’s has benefitted for years from growth within both the do-it-yourself market and the professional side. Lowe’s posted YoY revenue growth in the trailing 12 years, which included 24% top-line expansion in 2020 and 7.4% in 2021. The pandemic housing and home improvement boom might be fading, but Lowe’s stock is flashing some buy signals to long-term investors.

D.R. Horton, Inc. (DHI - Free Report) is one of America’s largest homebuilders with current operations in over 100 markets in 32 states. DHI caters to different types of buyers at different stages of life and income brackets. D.R. Horton’s revenue grew 37% last year help lift its adjusted earnings by 78%, and its outlook for FY22 and FY23 is solid because even as mortgage rates climb, the housing market is still millions of single-family homes short of demand. Plus, D.R. Horton’s valuation is looking more intriguing by the day.


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Lowe's Companies, Inc. (LOW) - free report >>

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