With all the hand-wringing over inverse yield curves, slowing housing prices, stalling economic growth, and lingering trade wars, the Dow and the S&P 500 keep posting new records.
One of the most encouraging signs for the market at this point is the fact that the Federal Reserve said it will step in and lower rates if necessary. That is an about-face from its attitude about the economy just six months ago.
Also, President Donald Trump picked two more potential appointments to the Federal Reserve.
One of the nominees, Judy Shelton, wants to lower interest rates to 0% in one to two years if appointed.
While low interest rates don’t benefit all sectors — banks have a harder time making money on loans in a lower-rate environment, for example — there are some that rise as rates fall.
The following seven A-rated stocks to buy for the rest of 2019 have some of those winners as well as others that are riding strong, long-term trends.
Roku (ROKU)
Roku (NASDAQ:ROKU) started trading in the fall of 2017 at around $23 a share. It’s now at $95. While that’s certainly a solid run, its recent run is what’s more impressive — Roku is up 219% year to date and 111% in the past year.
For a company with a $10 billion market cap, those are some pretty big numbers.
It also shows that Roku is still auditioning as a strong tech blue chip in coming years. The market has lifted it up and pushed it down on more than one occasion, unsure if this rising streaming platform can compete with the big players in the sector.
For now, Roku is doing very well. It went from a niche product that the first wave of cord-cutters adopted, to a brand widely recognized by the average consumer.
It still has room to grow in the U.S. and has the rest of the world waiting. At the end of 2018, Roku’s operating system was on almost 25% of TVs in the U.S., which is impressive for a young company playing against major television and online companies.
That means it will continue to grow or a big firm will buy it out at a premium. Either way, stockholders win.
Waste Management (WM)
Waste Management (NYSE:WM) is a waste collection, disposal and management company. No, it’s not the sexiest sector out there, but it is certainly a necessary one, especially in an e-commerce, consumer-driven economy like the U.S.
WM is one of the biggest players in this sector in North America. Most operations are local and WM has been consolidating collection services around the nation for many years.
The biggest mover in WM’s favor is the fact that many nations that previously accepted U.S. trash and recycling are no longer doing so. This has set off a scramble on what to do with all the waste.
The U.S. doesn’t have the facilities to recycle this trash, nor do most local firms have the space to dispose of it. This new challenge has raised prices and cut margins for smaller providers.
But WM is in a much better position. It has the option to move trash from one facility to another and use landfills that few have access to. That’s why the stock is up 32% year to date and has plenty of headroom moving forward.
Equity Lifestyle Properties (ELS)
Equity Lifestyle Properties (NYSE:ELS) is one of a handful of companies on the leading edge of a growing trend: manufactured homes and communities.
In the old days, these were called trailer parks. These aren’t the trailer parks of old, tough: they’re gated communities with upscale amenities and well-constructed prefab homes.
With many retiring generations under heavy debt loads and longer lifespans, these homes are becoming an attractive option for stretching retirees’ dollars.
What’s more, ELS operates as a real estate investment trust (REIT) that collects the rents, mortgages, and fees, and then passes the net profit onto shareholders in the form of dividends.
This is a relatively new trend but one that will likely continue as boomers leave the job market with little-to-no nest egg in record numbers. Up 35% in the past year and delivering an almost 2% dividend, this is an ideal market for REITs, especially in this sector.
Alliant Energy Corp (LNT)
Alliant Energy (NYSE:LNT) has electricity and natural gas distribution operations in Wisconsin, Minnesota, and Iowa.
Utilities are good choices for low-interest rate environments because they’re capital-intensive businesses. They need to keep their facilities and far-flung equipment operational all day, every day. That means spending money.
Because utilities are regulated business, where they can save money is a bonus to the company, consumers and shareholders. But the big money comes from the unregulated side: facilities that sell power and other utilities on the wholesale market to big clients.
LNT has a solid market and this current heat wave is always helpful for energy demand, especially on the unregulated side where demand spikes mean other utilities need to reach out for more capacity.
Year to date the stock is up 18% and has a respectable 2.9% dividend. You don’t want flash from your utilities, just steady, consistent growth. LNT is delivering that and should continue to as rates move lower.
Paycom Software (PAYC)
Paycom Software (NYSE:PAYC) has been on quite a run. It’s in one of the most popular sectors right now, Human Capital Management (HCM).
HCM is one of those new terms that basically means managing all aspects of a company’s workforce, from recruitment to retirement.
PAYC is a cloud-based HCM that encompasses the whole shooting match. One of its biggest selling points is that it doesn’t need any customization to operate its extensive platform. It comes from a core, proprietary HCM database that allows clients to access their platforms on the cloud, so there is also complete mobility.
The stock is up 134% in the past 12 months, and it’s still trading at a current PE ratio of 96, which means investors see some big room for growth, even after its current run.
What’s more, the company is expecting the same. PAYC recently upped its guidance for the remainder of the year.
Tractor Supply (TSCO)
Tractor Supply (NASDAQ:TSCO) is like a Home Depot (HD) for farmers and rural Americans.
The company was founded in Brentwood, TN in 1938 and has 1,700 stores in 49 states. It’s likely you haven’t heard of it unless you live outside the suburbs or city.
Tractor Supply specializes in the needs of farmers, ranchers, suburban and rural homeowners, as well as contractors and tradesmen.
Larger home improvement chains aren’t really focused on that niche market and can’t saturate a rural area as efficiently as TSCO can. It’s stores are smaller but busy because there’s always something that needs fixing or upkeep on a farm.
Plus, as more workers take advantage of working offsite, it means people are moving to more rural communities and getting to know their local Tractor Supply store.
The stock is up 32% year to date and still remains a solid value.
Essex Property Trust (ESS)
Essex Property Trust (NYE:ESS) is a REIT that has been around since the early 1970s.
Its primary focus is apartment complexes on the West Coast. ESS currently has more than 250 complexes in Southern California cities where there is always demand for housing.
Most of its properties skew towards the upper end of the market, but there is so much demand in the markets ESS focuses on that it doesn’t have issues keeping properties rented.
Since the financial crisis, younger generations have leaned toward leasing apartments rather than buying real estate. And even when they do buy property, they’re doing it later. That provides a growing market with a longer tail for quality REITs like ESS.
Plus, if you’re not paying for upkeep on a home, paying a premium on a rental means extra amenities and better locations. This trend will not slow anytime soon.
ESS is hot right now. Though it has been getting pricey, there’s still a lot of bullish sentiment and its earnings are strong. Up 21% year to date and delivering a 2.6% dividend in a low-interest rate market, all things are going its way.
— Louis Navellier
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Source: Investor Place