The housing market -- a major pillar of U.S. economic growth pre-pandemic -- is rebounding. Existing home sales, which were down 32% in May from January, have been rising consistently since late spring and are closing in on a 100% increase from May lows. Building permits, which are a leading indicator for the industry, peaked in January at 1.55 million units and are now back above that level (data through November). They too have lifted more than 50% from April's lows. Prices have held up as well. The S&P/Case-Shiller National Home Price Index is one of the most closely watched barometers of the housing market. Data for October 2020 showed that prices gained 7.9% year-over-year -- the highest rate in six years. Meanwhile, inventory levels are tight: currently there is a low 4.1-month supply of existing homes for sale (the average range is 4.5-7.5 months), according to the U.S. Census Bureau. On the other side of the pandemic, we expect demand for homes -- with yards between neighbors and no elevator buttons to press -- will remain strong.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Anthem Inc (ANTM); Activision Blizzard Inc (ATVI); Coca-Cola Co (KO); International Business Machine (IBM) and the Focus List deletions are Procter & Gamble Co. (PG); Electronic Arts, Inc. (EA); CIENA Corp. (CIEN); Vertex Pharmaceuticals, Inc. (VRTX).

Growth stocks outperformed value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and a high unemployment rate seemingly poised to keep them low for a long time), many investors are searching for high levels of income, often be found in value stocks. During recent years, the performance record has favored growth. Since 2010, the Russell 1000 Growth Index has climbed more than 400%, compared to an advance of 200% for the Russell 1000 Value Index. In eight of the past 10 years, growth stocks topped value. That hasn't always been the case. In the previous decade, including the Great Recession, value stocks were better performers, advancing a low 8%, but still better than growth, which declined 15%. Value investors trace their roots to the famous "Security Analysis" textbook, written by Ben Graham, an economics professor at Columbia University. The tide may now be turning. Progress on COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and banks) that have lagged in recent quarters, and value stocks have kept pace with growth stocks in the past quarter. In any event, value is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.5%, compared to the 1.0% current yield on the iShares Russell 1000 Growth Index ETF. This is not unimportant, as the current yield on the 10-year Treasury bond is 0.95%. For our list this week, we have screened our coverage universe for stocks that are BUY-rated by Argus Research analysts, have a Financial Strength rating of at least Medium, and have a yield of 3.0% or higher.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Growth stocks may be outperforming value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and economic shutdown seemingly poised to keep them low for a long time), many investors are still searching for high levels of income, which can often be found in value stocks. Progress on COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and regional banks) that have lagged in recent quarters, and value stocks have kept up the pace with growth stocks in the past quarter. The current yield on the iShares Russell 1000 Value Index ETF is 2.5%, compared to the 1.0% current yield on the iShares Russell 1000 Growth Index ETF. This is not unimportant, as the current yield on the 10-year Treasury bond is 0.95%.

After a strong first week of December, stocks stalled in week two. Concerns about the economy faltering from the current COVID-19 wave were punctuated when weekly initial unemployment claims were at the highest reading since September, and continuing claims increased. Hopes that the report would spur action on a stimulus package were dashed when Congress went home for the weekend with nothing settled.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.