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5 Blue-Chip Stocks to Win Big in the Second Half of 2021

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·5 min read
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The Dow had ended the final day of the first half of 2021 in the green, primarily boosted by an uptick in shares of Walmart, Goldman Sachs, and Boeing, to name a few. In fact, the blue-chip index gained more than 12% in the first half and defied cynical projections about a market retreat.

The Dow quite successfully posted double-digit gains in a period that saw Wall Street’s optimism about an economic recovery, especially after the beating it took last year due to the coronavirus outbreak. The government’s stimulus measures, consumers showing a willingness to spend more, businesses ramping up activities, and widespread vaccinations buoyed investors’ sentiment and helped the blue-chip index scale northward.

In reality, these factors are further expected to boost the blue-chip index in the second half as well. The financial aid provided by the government improved consumers’ confidence levels. The Conference Board’s consumer confidence index climbed to 127.3 in June from 120 in May, surpassed expectations, and is now on track to hit pre-pandemic levels, citing a MarketWatch article.

By the way, consumers’ outlooks about the current as well as future business conditions remain hopeful, a significant sign that the economy is firming. The Fed, in fact, had already offered a positive reading about the economy. The central bank expects economic growth this year to hit 7%, the fastest growth in a year since 1984, citing a Washington Post article.

Nevertheless, an upbeat consumer confidence level should increase outlays in the near future. Business spending, in the meanwhile, had already shown signs of improvement as the economy started to reopen gradually. After all, non-residential fixed investment, known to be a proxy for business spending, has been increasing for quite some time now.

Talking about vaccination, almost 60% of the entire adult U.S. population has been vaccinated, citing a CNBC article. Such a development no doubt will help the economy grow at a rapid pace in the near future and has prompted many market pundits to raise price targets of the blue-chip index for the second half.

In fact, citing another MarketWatch article, historically whenever the Dow rose in the first half of a year, the blue-chip index in the next six-month period climbed northward 72.4% of the time. Further, per Refinitiv data going back to the 1950s showed that whenever major bourses like the Dow posted double-digit gains in the first half of a year, it never saw an annual decline, quoting another CNBC article.

Thus, it’s imperative for an astute investor to cash in on this particularly sharp run-up in the 120-year-old index of 30 stocks, which by the by is widely expected to continue in the second half as well. We have, thus, highlighted five such blue-chip stocks that have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apple Inc.’s AAPL business primarily runs around its flagship iPhone. However, the Services portfolio that includes revenues from cloud services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services now became the cash cow. The Zacks Consensus Estimate for its current-year earnings has moved up 1.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 57.9%.

Visa Inc. V operates retail electronic payments network worldwide. It provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform. The Zacks Consensus Estimate for its current-year earnings has moved up 0.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 10.9%.

Walmart Inc. WMT has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. The Zacks Consensus Estimate for its current-year earnings has moved up 9.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 8.6%.

The Home Depot, Inc. HD is the world’s largest home improvement specialty retailer, with 2,291 retail stores across the globe as of the end of fiscal 2019. The Zacks Consensus Estimate for its current-year earnings has moved up 10.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 16.4%.

UnitedHealth Group Incorporated UNH provides a wide range of health care products and services, such as health maintenance organizations (HMOs), point of service plans (POS), preferred provider organizations (PPOs), and managed fee-for-service programs. The Zacks Consensus Estimate for its current-year earnings has moved up 0.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 10.3%.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


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Apple Inc. (AAPL) : Free Stock Analysis Report
 
Visa Inc. (V) : Free Stock Analysis Report
 
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
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