If ever there’s a time for triple-A rated stocks, this is it. There are global supply chain issues, which are affecting dozens of sectors. There’s pandemic stimulus money still sloshing around trying to find a place to go. And there are consumers and businesses getting hit with rising inflation.
While the easy answer is to blame the politicians in charge, the fact is, we’re at the beginning of a historic event. In 2008, the central banks of the world stepped in to save the global economy from the banking crisis.
They built a low-growth, low-interest rate environment also known as zero interest rate policy (ZIRP). And for the past 14 years, it has remained essentially intact — until now. The markets don’t like uncertainty, and what comes after ZIRP and the pandemic is uncertainty.
A triple-A rating from my Portfolio Grader means momentum, fundamentals and overall outlooks are top rated. These triple-A rated stocks will help get you through this and beyond:
- Commercial Metals Co (NYSE:CMC)
- Dillard’s Inc (NYSE:DDS)
- Golden Ocean Group (NASDAQ:GOGL)
- Newmark Group (NASDAQ:NMRK)
- Wyndham Hotels (NYSE:WH)
- Skyline Champion (NYSE:SKY)
- Encore Wire Corp (NASDAQ:WIRE)
Triple-A Rated Stocks: Commercial Metals Co (CMC)
CMC has been in operation for more than a century, opening its doors in 1915. If you haven’t heard of it, that’s not surprising since it has just a $4 billion market cap. That puts it at the lower end of the mid-cap stock range.
But CMC has two things going for it right now. First, its longevity proves that it can handle pretty much anything the markets and economy throw at it. Second, it recycles, manufactures and markets steel and metal products.
The recycling aspect means CMC is also an environmental, social and governance (ESG) stock, which is very helpful. But that vertical integration also means it doesn’t rely on many outside inputs for its products. That’s a huge benefit when most companies have relinquished their domestic means of production.
CMC stock has gained 60% in the past 12 months and 6% in the past three months. Yet the stock is only trading at a price-to-earnings (P/E) ratio of 7x and still has a solid 1.7% dividend. It’s a sleep-at-night grower to be sure.
This stock has a triple-A rating in my Portfolio Grader.
Dillard’s Inc (DDS)
Retailers have been a mixed bag in recent years. This is largely because they’ve needed to maintain their business during the pandemic and then faced supply chain issues, since many clothes and other goods come from Asia.
Dillard’s is a mid-cap retailer that has been in business since 1938. It’s seen its share of crazy markets and challenges. It has around 280 stores, predominantly focused on the South and South Central U.S., with its deepest penetration in Texas and Florida. It also has around 30 clearance centers.
DDS stock has a market cap of $5 billion, so it’s squarely in the mid-cap sector. The retailer is a significant player in the regions where it operates. It also has a well-built e-commerce operation.
The stock has soared 170% in the past year, yet its current P/E ratio remains around 9x. It’s still very attractive, especially as consumer spending remains strong.
This stock has a triple-A rating in my Portfolio Grader.
Golden Ocean Group (GOGL)
One more “O” in the ticker and you have a completely different company. GOGL isn’t a high-flying big-tech company. It owns and operates dry bulk shipping vessels.
Even after its 92% run in the past 12 months, GOGL stock’s market cap is just below the mid-cap range. But that might not last for long.
Dry bulk shipping companies move industrial commodities like grain, corn, steel, iron ore and containers. These are all core economic goods and during this supply chain crisis, it’s all hands on deck for GOGL. Its ships are commanding plenty of business at high rates, which means high margins.
But shipping has historically been a cyclical business. However, until the supply chain issues unwind — which could take years — GOGL is well-positioned for strong growth.
The real kickers for this stock are that it’s still trading at a current P/E ratio below 5x and it has a whopping 18% dividend.
This stock has a triple-A rating in my Portfolio Grader.
Newmark Group (NMRK)
When you start a real estate company the same year the Great Depression begins, you’re either very unlucky or very prescient. Newmark did that and remains a significant force in the full-service commercial real estate industry. This is testament to its ability to measure the risks and opportunities in almost any market.
That’s a good quality to have these days. Newmark provides numerous solutions for its clients, whether they’re looking for space, leasing space they own or even selling it. For example, it’s believed former President Donald Trump turned to the company when he wanted to sell his Washington, D.C. hotel last year.
Newmark’s durability in this sector also means it is unusually well connected. And its addition of London-based Knight Frank in 2006 means it has significant global reach as well.
But Newmark remains a boutique firm with a market cap of $3 billion, and that’s after the stock gained 104% in the past 12 months. It still has a current P/E ratio just a hair below 5x.
This stock has a triple-A rating in my Portfolio Grader.
Wyndham Hotels (WH)
This mid-cap hotel and resort company is a targeted play on consumers and businesses taking to the road, rails and air again. Wyndham owns and manages hotels and resorts — nearly 9,000 properties and 22 brands — but it also franchises properties.
The franchise business means the parent company can lower its risk of overextending its operations and expenses. And Wyndham can also receive management fees for operating franchise properties.
If the Wyndham name doesn’t sound familiar, I’m sure some of its brands do: La Quinta, Ramada, Days Inn, Microtel and Wingate, and to name a few. It also has upscale properties under the Registry, Dolce, Tryp and other select brands.
These brands may be familiar in the U.S., but Wyndham has properties in 95 countries. It has a broad reach and some of the most iconic brands in the hotel business.
WH stock is up 38% in the past 12 months, and this is while the omicron variant has suppressed travel near the end of 2021. This year should see strong numbers that should continue as the travel industry rebounds. And given its variety of price points, business will be expanding.
This stock has a triple-A rating in my Portfolio Grader.
Skyline Champion (SKY)
One new trend that has been gaining steam since the pandemic is the desire for people to get away from it all and simplify. That’s great news for SKY, since it is North America’s leading mobile and modular home builder.
The company has customers ranging from retirees more interested in location than a big house to younger demographics that find a spot, own a small home and build their careers. It’s a lot easier to do the latter when you work from home, which has grown in popularity. And many modular and mobile home communities are meeting this new wave of customers with much nicer facilities.
There’s an entire sector evolution going on here, and Skyline Champion is a market leader. Its stock is up 88% in the past 12 months, and it’s trading at current P/E ratio near 30x. And of course, it’s one of my triple-A rated stocks.
This stock has a triple-A rating in my Portfolio Grader.
Encore Wire Corp (WIRE)
When investors talk and think about real estate or property, the one thing they rarely think about is the key infrastructure components involved. For example, there’s a metal they say has a PhD in Economics. Sometimes it’s called Dr. Copper.
Copper wiring is fundamental to economic expansion because it’s used in commercial and residential construction, vehicle production, telecom and a host of other industries. When copper prices rise, it’s considered a leading indicator of economic expansion. When it drops, the opposite is true.
Encore Wire is a leader in copper wire for commercial, residential and industrial buildings. Copper prices are now at historic highs. That means there’s a lot of demand out there. And given the new infrastructure bill as well as the housing demand, this trend will be playing out for a while.
WIRE stock has gained 77% in the past 12 months, yet has a current P/E ratio hovering around 5x.
This stock has a triple-A rating in my Portfolio Grader.
— Louis Navellier and the InvestorPlace Research Staff
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Source: Investor Place