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2 Top-Ranked Stocks to Buy in 2024 for Value and Dividends
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The S&P 500 and the Nasdaq posted solid mid-week gains after stalling out a bit on Tuesday ahead of the highly-anticipated CPI release on Thursday morning.
The rebound to start the first full week of January helped both key indexes climb solidly back above their 21-day moving averages, signaling the bulls are ready to keep fighting in 2024.
The market could, no doubt, experience more selling in the coming days and weeks, especially as Wall Street digests Q4 results and first quarter guidance.
That said, many investors likely want to remain on the lookout for strong stocks to add to their portfolios now and throughout the early part of 2024 since many of the bullish factors that drove last year’s rally remain intact.
Today we dive into two Zacks Rank #1 (Strong Buy) stocks that operate boring businesses that aren’t going out of style.
Both stocks also offer solid long-term upside, impressive relative value despite market and sector-topping performances, and pay dividends.
Tempur Sealy is one of the largest mattress and bedding companies in the world, operating under Tempur-Pedic, Sealy, and Stearns & Foster brands. TPX also sells value-focused private labels and OEM products. Tempur Sealy, like all retailers, has invested in its digital and direct-to-consumer efforts to fight back against digital-focused newcomers and bed-in-a-box firms.
Image Source: Zacks Investment Research
On top of that, TPX expects to close its previously announced deal to buy mattress retail giant Mattress Firm in mid to late 2024. The roughly $4 billion deal will bring together Tempur Sealy’s product development and manufacturing capabilities with vertically integrated retail and lead to a combined global footprint of roughly 3,000 retail stores worldwide, 30 e-commerce platforms, 71 manufacturing facilities, and four R&D facilities.
TPX faces a difficult to compete against stretch of huge growth following the pandemic spending and housing boom. Tempur Sealy’s revenue is projected to come in flat in 2023, with its adjusted earnings projected to slip 7%. Thankfully, its revenue is projected to climb 3% next year to $5.08 billion to help boost its adjusted earnings by over 16%.
Image Source: Zacks Investment Research
TPX’s FY24 earnings outlook has improved over the last week and its most arcuate/most recent EPS estimate came in 6% above consensus to help it land a Zacks Rank #1 (Strong Buy) right now.
Tempur Sealy’s business is hardly splashy, but sleep is never going out of style and the housing market will improve over the long haul. Tempur Sealy also pays a dividend and seven of the 10 brokerage recommendations Zacks has are “Strong Buys.”
TPX shares have soared 2,800% in the last 15 years vs. the Zacks Retail sector’s 550% and the S&P 500’s 480%. This impressive performance includes a 320% surge during the past five years. TPX recently rebounded above its 21-day moving average after it pulled back from fresh highs in mid-December. Tempur Sealy completed the coveted golden cross last month, where the shorter-dated moving average climbs above the longer-dated trendline.
Image Source: Zacks Investment Research
Tempur Sealy trades at a 19% discount to the Zacks Retail sector at 17.8X forward earnings despite its massive outperformance. TPX also trades at an 18% discount to its highs even as its price edges right back up to fresh records.
NRG Energy is a utility powerhouse that boasts a network of approximately 7.3 million customers. NRG spent the last several years expanding its digital-focused efforts as electric grids, homes, and businesses become increasingly high-tech. NRG bought Vivint Smart Home in March 2023 to expand its reach and enable it to bundle offerings for utilities, home security, automation, and beyond. NRG is now built to succeed in a world full of connected smart homes and buildings.
The completion of NRG’s Vivint Smart Home deal marked and end of its expansion efforts for now. Activist investors quickly started to force NRG to focus on returning far more value to shareholders. NRG on November 20 said that it was replacing its CEO and shaking up the board. NRG also announced a new $950 million accelerated share repurchase in November.
Image Source: Zacks Investment Research
NRG stock has skyrocketed 60% during the past year vs. the Utilities Sector’s 8% drop and the benchmark’s 20% climb. NRG hit new all-time highs on January 8, with the stock also up 120% in the last 15 years vs. its sector’s 52%. NRG is trading above its 21-day moving average and a recent dip has taken it closer to neutral RSI levels vs. rather overheated to end 2023.
NRG might be a bit overbought by historical levels. But despite its outperformance and its run to fresh highs, NRG trades at a 38% discount to the Utilities sector and 6% below its 10-year median at 8.7X forward 12-month earnings.
Image Source: Zacks Investment Research
Investors should note that Utilities could be poised for a larger-scale revival as interest rates fall and Wall Street looks for dividend payers again. NRG’s dividend yields 2.9% right now vs. the Utilities sector’s 3.5%. NRG’s Utility - Electric Power segment is currently in the top 32% of over 250 Zacks industries.
On top of all that, NRG’s adjusted earnings are projected to climb by 93% in FY23 and 18% higher next year. Plus, its earnings outlook has improved significantly recently, with its most accurate/most recent EPS estimates coming in solidly above consensus to help it land a Zacks Rank #1 (Strong Buy).
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2 Top-Ranked Stocks to Buy in 2024 for Value and Dividends
The S&P 500 and the Nasdaq posted solid mid-week gains after stalling out a bit on Tuesday ahead of the highly-anticipated CPI release on Thursday morning.
The rebound to start the first full week of January helped both key indexes climb solidly back above their 21-day moving averages, signaling the bulls are ready to keep fighting in 2024.
The market could, no doubt, experience more selling in the coming days and weeks, especially as Wall Street digests Q4 results and first quarter guidance.
That said, many investors likely want to remain on the lookout for strong stocks to add to their portfolios now and throughout the early part of 2024 since many of the bullish factors that drove last year’s rally remain intact.
Today we dive into two Zacks Rank #1 (Strong Buy) stocks that operate boring businesses that aren’t going out of style.
Both stocks also offer solid long-term upside, impressive relative value despite market and sector-topping performances, and pay dividends.
Tempur Sealy International ((TPX - Free Report) )
Tempur Sealy is one of the largest mattress and bedding companies in the world, operating under Tempur-Pedic, Sealy, and Stearns & Foster brands. TPX also sells value-focused private labels and OEM products. Tempur Sealy, like all retailers, has invested in its digital and direct-to-consumer efforts to fight back against digital-focused newcomers and bed-in-a-box firms.
Image Source: Zacks Investment Research
On top of that, TPX expects to close its previously announced deal to buy mattress retail giant Mattress Firm in mid to late 2024. The roughly $4 billion deal will bring together Tempur Sealy’s product development and manufacturing capabilities with vertically integrated retail and lead to a combined global footprint of roughly 3,000 retail stores worldwide, 30 e-commerce platforms, 71 manufacturing facilities, and four R&D facilities.
TPX faces a difficult to compete against stretch of huge growth following the pandemic spending and housing boom. Tempur Sealy’s revenue is projected to come in flat in 2023, with its adjusted earnings projected to slip 7%. Thankfully, its revenue is projected to climb 3% next year to $5.08 billion to help boost its adjusted earnings by over 16%.
Image Source: Zacks Investment Research
TPX’s FY24 earnings outlook has improved over the last week and its most arcuate/most recent EPS estimate came in 6% above consensus to help it land a Zacks Rank #1 (Strong Buy) right now.
Tempur Sealy’s business is hardly splashy, but sleep is never going out of style and the housing market will improve over the long haul. Tempur Sealy also pays a dividend and seven of the 10 brokerage recommendations Zacks has are “Strong Buys.”
TPX shares have soared 2,800% in the last 15 years vs. the Zacks Retail sector’s 550% and the S&P 500’s 480%. This impressive performance includes a 320% surge during the past five years. TPX recently rebounded above its 21-day moving average after it pulled back from fresh highs in mid-December. Tempur Sealy completed the coveted golden cross last month, where the shorter-dated moving average climbs above the longer-dated trendline.
Image Source: Zacks Investment Research
Tempur Sealy trades at a 19% discount to the Zacks Retail sector at 17.8X forward earnings despite its massive outperformance. TPX also trades at an 18% discount to its highs even as its price edges right back up to fresh records.
NRG Energy, Inc. ((NRG - Free Report) )
NRG Energy is a utility powerhouse that boasts a network of approximately 7.3 million customers. NRG spent the last several years expanding its digital-focused efforts as electric grids, homes, and businesses become increasingly high-tech. NRG bought Vivint Smart Home in March 2023 to expand its reach and enable it to bundle offerings for utilities, home security, automation, and beyond. NRG is now built to succeed in a world full of connected smart homes and buildings.
The completion of NRG’s Vivint Smart Home deal marked and end of its expansion efforts for now. Activist investors quickly started to force NRG to focus on returning far more value to shareholders. NRG on November 20 said that it was replacing its CEO and shaking up the board. NRG also announced a new $950 million accelerated share repurchase in November.
Image Source: Zacks Investment Research
NRG stock has skyrocketed 60% during the past year vs. the Utilities Sector’s 8% drop and the benchmark’s 20% climb. NRG hit new all-time highs on January 8, with the stock also up 120% in the last 15 years vs. its sector’s 52%. NRG is trading above its 21-day moving average and a recent dip has taken it closer to neutral RSI levels vs. rather overheated to end 2023.
NRG might be a bit overbought by historical levels. But despite its outperformance and its run to fresh highs, NRG trades at a 38% discount to the Utilities sector and 6% below its 10-year median at 8.7X forward 12-month earnings.
Image Source: Zacks Investment Research
Investors should note that Utilities could be poised for a larger-scale revival as interest rates fall and Wall Street looks for dividend payers again. NRG’s dividend yields 2.9% right now vs. the Utilities sector’s 3.5%. NRG’s Utility - Electric Power segment is currently in the top 32% of over 250 Zacks industries.
On top of all that, NRG’s adjusted earnings are projected to climb by 93% in FY23 and 18% higher next year. Plus, its earnings outlook has improved significantly recently, with its most accurate/most recent EPS estimates coming in solidly above consensus to help it land a Zacks Rank #1 (Strong Buy).