11 Best Stocks to Buy for Investment
In this piece, we will take a look at the 11 best stocks to buy for investment. If you want to skip our overview of investing and some recent financial news, then take a look at the 5 Best Stocks to Buy for Investment.
As we approach the conclusion of 2023, the much-anticipated recession has not occurred in major economies such as the U.S. and China, contrary to earlier predictions by various analysts. In March, over 70% of the National Association of Business Economics' (NABE) survey participants predicted that the consumer price index (CPI) would remain above 4% by year-end, with 24% speculating a potential recession starting in the third quarter of 2023.
During the October 31-November 1 meeting, the Federal Reserve opted not to raise interest rates for the third time in the last four sessions. This decision was influenced by a drop in the CPI to 3.7% in September and a further decrease to 3.2% in October, as reported by the Bureau of Labor Statistics. The employment rate has exhibited stability with minor fluctuations, and the stock market has demonstrated resilience, with the S&P 500 showing a 19.23% increase and the NASDAQ-100 rising by 47.13% year-to-date as of November 24. Additionally, the U.S. GDP experienced growth of 4.9% in the third quarter of 2023, a notable increase from the 2.1% recorded in the second quarter.
Optimism prevails in the stock market, with 55% of the S&P 500, up 8% on November 20, trading above its 200-day moving average. This positive trend, as reported by Reuters, suggests a more widespread upward trajectory in a variety of stocks, distinct from the tech-driven rally in the first half of 2023. In technical analysis, the 200-day moving average serves as a significant resistance point, often viewed as a hurdle for sustained share outperformance over the long term.
With that said, it is important to remember that, despite the occasional accuracy of experts in predicting market conditions, the inherent unpredictability of the market persists for various reasons. As such, selecting the appropriate stocks for investment is a science that entails assessing a number of variables to arrive at informed decisions and potentially generate profits. Ordinary investors, lacking the advanced and costly tools available to hedge funds, have several avenues to make money in the stock market. Options trading and holding onto shares for long-term appreciation are among these strategies. A long-term investment horizon frequently results in substantial dividends through appreciation, especially appealing in periods of low interest rates with limited opportunity costs.
The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are excellent choices for inclusion in a long-term stock portfolio, given their track record of consistently rising dividends. The ongoing pattern of dividend growth reflects financial stability, effective management, and a dedication to rewarding investors, making these stocks attractive to those seeking both reliability and growth.
Our Methodology
In curating our list of the best stocks to buy for investment, we analyzed data from Insider Monkey's database of over 910 hedge funds. We identified 11 stocks that have demonstrated steady growth and are aligned with a long-term investment strategy. These stocks operate within defensive sectors such as consumer staples, healthcare, and energy. Notably, many of these companies boast robust dividend track records and maintain stable market positions, contributing to their low volatility. The list is organized based on the number of hedge fund holders for each company.
11. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 52
Colgate-Palmolive Company (NYSE:CL), headquartered in Midtown Manhattan, New York City, is a multinational corporation specializing in the manufacturing, distribution, and provision of a diverse range of household, healthcare, personal care, and veterinary products.
As of September 14, the company announced a consistent quarterly dividend of $0.48 per share, maintaining its remarkable track record of increasing dividends for 61 consecutive years. The stock's dividend yield as of November 28 stood at 2.49%.
In Q3 2023, Colgate-Palmolive Company (NYSE:CL) reported an EPS of $0.86 and a revenue of $4.92 billion, surpassing consensus estimates by $0.07 and $100 million, respectively. Post the earnings release, analyst Dara Mohsenian from Morgan Stanley adjusted the price target for the consumer company's shares to $85 from $89 while maintaining an 'Overweight' rating.
In the third quarter of 2023, among the 910 profiled hedge funds in the Insider Monkey database, 52 had a stake in Colgate-Palmolive Company (NYSE:CL). The largest stockholder was First Eagle Investment Management, holding 11 million shares of Colgate-Palmolive Company (NYSE:CL) with a combined value of $783.12 million.
10. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 57
Established in 1892, The Coca-Cola Company (NYSE:KO) is a prominent multinational American corporation recognized for its iconic beverage, Coca-Cola, and a broad range of non-alcoholic beverage concentrates, syrups, and alcoholic beverages. In the first half of FY23, the company demonstrated strong financial performance, with operating cash flow reaching $4.6 billion and free cash flow hitting $4 billion. This highlights The Coca-Cola Company (NYSE:KO)'s robust cash generation capability, positioning it well to meet shareholder commitments in the future. As of November 20, the company offers a quarterly dividend of $0.46 per share, resulting in a yield of 3.15%.
With a remarkable history of consistent dividend increases spanning six decades and a resilient business model, The Coca-Cola Company (NYSE:KO) has attracted attention from individual and institutional investors alike. As of the end of the third quarter, among the 910 funds tracked by Insider Monkey, 57 hedge funds had positions in the company. Notably, Warren Buffett remained a significant investor, maintaining a substantial stake valued at $22.39 billion in The Coca-Cola Company (NYSE:KO).
Much like The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP), The Coca-Cola Company (NYSE:KO) is one of the best stocks to buy for investment.
9. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 62
Philip Morris International Inc. (NYSE:PM) is a multinational tobacco corporation with a strong global presence, distributing its products across more than 180 countries. The company's flagship and top-selling product is Marlboro, making it a prominent player within the tobacco industry, often collectively referred to as "Big Tobacco."
On September 13, Philip Morris International Inc. (NYSE:PM) announced a quarterly dividend of $1.30 per share, marking a 2.4% increase from the previous dividend of $1.27. The dividend was disbursed to shareholders on October 12, with the record date for eligible shareholders set at September 27. As of November 28, the yield came in at 5.53%.
According to Insider Monkey's third quarter database, 62 hedge funds expressed bullish sentiments toward Philip Morris International Inc. (NYSE:PM), an increase from the 54 funds in the previous quarter. Notably, Terry Smith’s Fundsmith LLP emerged as a significant stakeholder in the company, holding 15.06 million shares valued at $1.39 billion.
8. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 64
Headquartered in the United States, CVS Health Corporation (NYSE:CVS) is a prominent healthcare organization overseeing an extensive network of retail pharmacies and clinics nationwide. The company manages various brands, including CVS Pharmacy (a retail pharmacy chain), CVS Caremark (a pharmacy benefits manager), and Aetna (a health insurance provider).
The third quarter of 2023 witnessed CVS Health Corporation (NYSE:CVS) achieving sales of $89.76 billion, indicating a nearly 11% increase from the corresponding period in the previous year. The company disclosed a net income of $2.27 billion, or $1.75 per share, for the third quarter. This marked a significant turnaround from the net loss of $3.40 billion, or $2.59 per share, reported for the same period a year ago. Excluding specific items such as amortization of intangible assets and capital losses, the adjusted earnings per share for the quarter stood at $2.21.
As of the conclusion of the third quarter in 2023, data from Insider Monkey’s database, monitoring 910 hedge funds, indicated that 64 hedge funds had positions in CVS Health Corporation (NYSE:CVS). The firm’s largest shareholder was John Overdeck and David Siegel’s Two Sigma Advisors since it owned $344 million worth of shares.
Coho Partners Relative Value Equity Fund made the following comment about CVS Health Corporation (NYSE:CVS) in its second quarter 2023 investor letter:
“In December of 2017, CVS Health Corporation (NYSE:CVS) agreed to buy Aetna, which broadened its offering by entering the managed care business. CVS has been moving its portfolio to a more value-based outcome model, and Aetna was a major move in that direction. We were willing to accept the leverage that came with the deal because CVS has a very cash generative model, and we anticipated the free cash flow would enable the company to de-lever fairly quickly.
By mid-2022, CVS was in a position to use the free cash flow that had been going to debt repayment to do bolt-on deals to further prepare for the value-based outcome model and/or return more cash to shareholders in the form of higher dividends or share repurchases. However, CVS lost a “star” in its largest Medicare plan in late 2022 and this will adversely impact earnings in 2024. This was a surprise and disappointment to us, but management should be able to regain the “star” in the back half of 2023, which will then give the company a nice tailwind in 2025…” (Click here to read the full text)
7. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 65
Costco Wholesale Corporation (NASDAQ:COST) operates a global chain of membership warehouses, primarily under the name "Costco Wholesale," providing high-quality, brand-name merchandise at significantly lower prices than conventional wholesale or retail sources. The company offers a quarterly per-share dividend of $1.03, resulting in a dividend yield of 0.63% as of November 28. Costco Wholesale Corporation (NASDAQ:COST) has consistently increased its dividends for the past 19 years, demonstrating its commitment to rewarding shareholders.
According to Insider Monkey’s data, 65 hedge funds were long on Costco Wholesale Corporation (NASDAQ:COST) at the end of Q3 2023, compared to 67 funds in the previous quarter. Bridgewater Associates, led by Ray Dalio, is one of the most prominent stakeholders in the company, holding 828,184 shares valued at more than $467.8 million.
RiverPark Advisors mentioned Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2023 investor letter. Here is what the firm has to say:
“Costco Wholesale Corporation (NASDAQ:COST), founded in 1983, is the world’s third-largest retailer with 850 stores, $240 billion in revenue and 68 million members spread across North America, Europe, Asia, and the Southern Pacific Region. The company is known for its strong value proposition driven by high-quality low-cost offerings including a well-regarded private-label brand. Costco regularly ranks at the top of customer surveys related to brand trust, product price and quality, and all-around experience. Historically, 90% of the company’s shoppers renew their memberships, which generate more than 50% of operating income.
Through expanding market share, new store openings, increasing member productivity, and omnichannel expansion, we believe the company can grow revenues annually in the high single digit percentage range. This revenue growth should yield steadily growing margins and EPS growth in the low-to-mid-teens, which should drive shareholder returns in the same range.”
Costco Wholesale Corporation (NASDAQ:COST), in addition to The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP), ranks as one of the best stocks for investment.
6. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 65
PepsiCo, Inc. (NASDAQ:PEP) is a multinational food, snack, and beverage corporation, renowned for producing a diverse range of popular brands. On November 16, the company announced a quarterly dividend of $1.265 per share, consistent with its previous dividend. With a history of increasing dividends for the past 51 years, it stands out as one of the best stocks to buy for investment. As of November 28, the stock boasts a dividend yield of 3.01%.
At the end of Q3 2023, 65 hedge funds tracked by Insider Monkey reported having stakes in PepsiCo, Inc. (NASDAQ:PEP), compared to 68 in the previous quarter. The combined value of these stakes is approximately $4.3 billion.
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Disclosure: None. 11 Best Stocks to Buy for Investment is originally published on Insider Monkey.
