This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Stocks were mixed on Friday morning amid continued uncertainty in Washington and new consumer spending and inflation data. The Commerce Department said that consumer spending rose a stronger-than-expected 0.8% in August after a decline of 0.1% in July, while the core personal consumption expenditures price index - the Fed's preferred measure of inflation - rose 0.3%, in line with the July increase. The core PCE also rose 3.6% from the prior year, again in line with July's increase and slightly above the consensus forecast of 3.5% growth. The Dow rose 0.3%, the S&P was flat, and the Nasdaq fell 0.3%. Crude oil traded near $75 per barrel, while gold rose $2 to $1759 per ounce.

Cash is no longer king for point-of-sale transactions, with only 12% market share compared to 38% for credit cards, 29% for debit cards, and 10% for the fast-growing digital wallet sector. We see a long secular road for growth, as digital payments are in the early stages of transition. Factors driving this trend include U.S. banks and the Federal Reserve encouraging digital over paper money; the pandemic, which has accelerated contactless payments as a safety step; and greater merchant acceptance for small dollar amounts. Importantly, the emerging generations (Millennials and Gen Z) embrace both mobile banking and digital payments. Forecasts call for digital-payment transaction value to grow at an 11% compound annual rate for the next five years and to reach $11 trillion from the 2020 level of $5.4 trillion. Several companies in the Argus Research fundamental universe of coverage are in position to take advantage of this opportunity. Each of the following stocks is rated BUY at Argus.