There are two ways a stock gets into the triple digits — it’s priced there to start, or it grows there.
However it happens, don’t mistake a high price for a quality stock. It’s the same as low-priced stocks but in reverse.
These are all “A”-rated stocks in my Portfolio Grader I use to recommend Growth Investor stocks and are great long-term holdings, no matter how much you have.
But that leaves the little guy looking at $10,000 or more for just 100 shares of a high-priced stock.
So, don’t buy 100 shares. Buy what you can afford. Some brokers even offer fractional shares. The point is, buy what you can of a quality stock and let it grow.
It’s better to be diversified than have all your money in a handful of stocks. These seven stocks over $100 worth their price tag will get you started.
Stocks to Buy: Galapagos (GLPG)
Galapagos (NASDAQ:GLPG) is a Belgian biotech firm that has a handful of drugs in advanced stages of its pipeline, for numerous indications.
It may seem odd that a company with no drugs on the market saw its stock rise 155% in the past year, and has a $16 billion market capitalization.
It’s not. You see, it’s partnered with Gilead Sciences (NASDAQ:GILD) for its most promising drug for rheumatoid arthritis and Crohn’s disease. The drug is filgotinib and it’s looking like a massive blockbuster. There are a number of other potential indications that the drug may qualify for as well.
This would be a big deal for GILD — and of course GLPG. The stock is moving because it’s almost through Phase 3 trials and it has had the help and funding of GILD to get it done right.
It’s a little expensive, but it could be a major player in both the short and long term.
Leidos (NYSE:LDOS) has been a major player as an engineering and solutions contractor to the U.S. government since 1969. It was previously known as Science Applications International Corporation (SAIC).
Basically, when the government needed extra people to work on big problems, like analyzing the effect of nuclear weapons or creating radiation-based cancer therapies, it turned to LDOS.
When the U.S. Department of Defense needed an integrated healthcare network, LDOS was there. It helped clean up nuclear messes at Three Mile Island and the Hanford Site.
And most recently, it’s been doing a lot of aerospace work as well as defense and intelligence work. That’s why it bought Dynetics for $1.6 billion in cash in December.
Leidos sees space as the next frontier and a lot of countries are getting involved in new efforts. This has significant implications for intelligence and counter-intelligence work, satellite networks and a whole host of other challenges. LDOS is positioning itself for that growing need.
The stock is up almost 80% in the past year — in fact, it’s already up nearly 12% in less than a month since I added it to my Growth Investor buy list — and it still trades at a price-to-earnings ratio of 25.
Franco-Nevada (NYSE:FNV) is a very interesting play on gold.
The price of gold is up almost 30% in the past year. FNV stock is up twice that. This isn’t that unusual, since gold mining stocks tend to rise faster than the metal when times are good — and vice versa in bad times.
But FNV isn’t a gold miner.
And the Midas Metal will rise and fall for a number of reasons, many times without much logic. It has historically been a great hedge against stocks when things get tough, but in good times it’s expensive to hold physical gold, since it costs money to keep it somewhere and it’s not necessarily appreciating in value.
FNV splits the middle. It leases land to gold miners. It doesn’t have all the risk and overhead of mining and all the equipment. Yet it gets paid as a landlord as well as taking a piece of the gold that’s mined.
It’s kind of like a real estate investment trust in the gold sector. It has a little dividend (0.8% at this time) as a nice kicker as well.
If you’re looking for a gold hedge as the markets get toppy, this is a unique choice.
Target (NYSE:TGT) has grown like it was tech company in the past year. The stock is up 60%, in a year where retail hasn’t been a consistently bullish sector.
But TGT learned from its mistakes a few years back and underwent a major transformation to stay relevant where other department stores and big-box retailers dragged their feet.
Now it’s reaping the rewards for its efforts.
Its online sales are continuing to grow. Its in-store pick-up is another option that is making shopping easier as well — and paying off.
And it’s in-store grocery offerings were also a smart move, when expanding a competitive and low-margin business like that was risky.
These are all progressive ideas that were implemented boldly, which would seem to be out of character for a 118-year-old company. But it’s now the poster child of how old, established retailers thrive in this new economy.
What’s more, TGT is a dividend aristocrat — it has raised its dividend (now sitting at 2.2%) every year, for the past 52 years. That’s a key factor I look for in finding Elite Dividend Payers for my Growth Investor buy list.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) has been around for 183 years. It is not only a dividend aristocrat — a stock that has raised its dividend every year for at least 25 years — it’s a dividend king.
It has raised its dividend for more than 50 years consecutively.
Now this consumer staples name hasn’t always had clear sailing. Remember, Martin Van Buren was president then and the year he took office the Panic of 1837 hit.
Then there was the Civil War, World War I and the Great Depression. The point is, PG has not only been able to survive these catastrophes time and again, it has found a way to thrive.
But its near undoing was when it realized that new generations of consumers were no longer buying consumer staples like they had since the 1950s. Name brands were no longer a big deal. And its name brands commanded higher margins in its low-margin world.
But it adapted. It sold off a huge chunk of its poor performing brands and rebuilt for its third century in business.
The stock is up 25% in the past year and it delivers a nearly 2.4% dividend to boot.
Mid-America Apartment Communities (MAA)
Mid-America Apartment Communities (NYSE:MAA) is a real estate investment trust that serves the South, Southeast, Southwest and Mid-Atlantic regions.
Primarily, it owns and operates mid-scale and upscale apartment complexes in urban or suburban areas where young professionals live and work. In many cities, there is also big demand for short-term furnished rentals for business travelers who may stay in town for weeks at a time, and we’ve found this to be a compelling investment opportunity at Growth Investor.
Given the student loan issues that many young professionals have these days, buying a house isn’t the first thing people do any longer. And also, young workers tend to need to be mobile, moving to where the opportunities are.
Owning a home can be more difficult than it’s worth as they climb the corporate ladder.
MAA has well-placed properties around city centers that give residents access to work and recreation but also create a sense of community and security.
The stock is up 42% this past year and yet its dividend is a solid 2.7%.
NextEra Energy (NEE)
NextEra Energy (NYSE:NEE) is the world’s largest producer of wind and solar energy. But it also a runs a large utility in Florida, formerly known as Florida Power & Light.
It isn’t unusual for utilities to have a regulated utility business and an unregulated energy side. But NEE is unusual for it huge commitment to renewable energy. And this is where the growth is paying off now.
Many states have mandated that a growing amount of energy needs to come from renewable resources over time. There are carbon credits and swaps for using solar rather than coal, for example.
Also, the technology has gotten so good, that renewable energy is competitive with fossil fuels for the first time. And it’s much more efficient.
On the utility side, Florida is one of the fastest growing states again. That means more demand and better margins.
The stock is up 47% in the past 12 months, and it also comes with a nice 2% dividend. The combination of growth, income and strong business fundamentals makes this one of my top Elite Dividend Payers for Growth Investor.
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Source: Investor Place