As we all know, investment in stocks can be a difficult ride if one decides to go ahead with their own research and practices rather than investing in indexes or exchange traded funds (ETFs). Analysing the direction of the company’s stock price and whether or not it has a perfect balance of investor sentiment and strong fundamentals can sometimes be a tricky and cumbersome process. This is the sole reason that there are entire courses dedicated to it. On a daily basis, Wall Street analysts release thousands of research reports to invest for firms that they believe stocks are expected to perform well or should be avoided.
It is somewhat true when people say that investing these days is a roller coaster ride. To support this, it has been seen how, in a couple of years, stocks that were believed to be immune to the usual market downturns have fallen by multiple percentage points only to increase again and then to drop again. All these uncertainties are led by a macroeconomic turmoil that is stuck in the system ever since COVID-19 wreaked global havoc.
So, as the market fluctuates and analysts worry about potential recession in the later part of the year, what should an investor do? Well, to determine this, we first need to understand the broader business model of the renowned companies and the significance of their market dominance. It goes without saying that investing is the long-term process i.e. simply buying the stocks and then forgetting them for a couple of years.
Therefore, we present the list of top 10 stocks to invest now for maximum return. These stocks were determined after rigorous research about their business models and analysing the viewpoints of market experts.
Top 10 Stocks to Invest now for good returns
- Apple Inc. (NASDAQ: AAPL)
- Microsoft Corporation (NASDAQ: MSFT)
- Tesla, Inc. (NASDAQ: TSLA)
- Infosys Limited American Depositary Shares (NYSE: INFY)
- Amazon.com, Inc. (NASDAQ: AMZN)
- The Walt Disney Company (NYSE: DIS)
- PayPal Holdings, Inc. (NASDAQ: PYPL)
- Mastercard Incorporated (NYSE: MA)
- Visa Inc. (NYSE: V)
- American Express Company (NYSE: AXP)
1. Apple Inc. (NASDAQ: AAPL)
Apple Inc. (NASDAQ: AAPL) is one of the world’s leading consumer electronics and personal computer companies. It released financial results for its fiscal 2023 second quarter ended April 1, 2023, posting quarterly revenue of $94.8 billion, down 3% year-over-year. Its quarterly earnings per diluted share came in at $1.52, unchanged year-over-year. The company’s business performance saw significant improvement as compared to the quarter ended December, and it generated strong operating cash flow of $28.6 billion.
The company’s Board has authorized an additional $90 billion for share repurchases. It has raised its quarterly dividend for the 11th year in a row which makes it a valuable stocks to invest now.
2. Microsoft Corporation (NASDAQ: MSFT)
Microsoft Corporation (NASDAQ: MSFT) develops and licenses consumer and enterprise software. In 3Q23, the company’s revenue came in at $52.9 billion, exhibiting a rise of 7% on the year-over-year basis (10% in constant currency). Its operating income was $22.4 billion and increased 10% (up 15% in constant currency) on year-over-year basis. Focused execution by its sales teams and partners in this dynamic environment led to Microsoft Cloud revenue of $28.5 billion, an increase of 22% year-over-year.
For 4Q23, the company expects revenues from productivity and business processes of $17.9 billion- $18.2 billion. These revenues should be supported by Office 365 Commercial. Microsoft Corporation anticipates to generate revenues of $23.6 billion- $23.9 billion from Intelligent Cloud. Azure and other cloud services are expected to support these revenues. Due to high valuation and demands of the product, it is becomes one of the safest stocks to invest now.
3. Tesla, Inc. (NASDAQ: TSLA)
Tesla, Inc. (NASDAQ: TSLA) is a vertically integrated sustainable energy company, aiming to transition the world to electric mobility by manufacturing EVs.
The company plans to use lithium iron phosphate (LFP) batteries in an affordable EV and a semi-heavy electric truck.
Total revenue of the company grew 24% year-over-year in 1Q23 to $23.3 billion, supported by growth in vehicle deliveries and in other parts of the business. Operating income of Tesla, Inc. decreased year-over-year to $2.7 billion in 1Q23, resulting in 11.4% operating margin.
In the current environment, the company sees unique opportunity. As several other carmakers work through challenges with their respective unit economics of their EV programs, the company plans to leverage its position as a cost leader. It continues to focus on rapidly growing production and investments in autonomy and vehicle software. The company remains on track with its growth investments. The company has sufficient liquidity to fund its product roadmap, long-term capacity expansion plans and other expenses. It continues to believe that its operating margin will remain among the highest in the industry.
4. Infosys Limited American Depositary Shares (NYSE: INFY)
Infosys Limited (NYSE: INFY) is a leading global IT services provider. Based in Bangalore (India), the company leverages its offshore outsourcing model to derive 60% of its revenue from North America.
The company announced a new collaboration with Walmart Commerce Technologies. As a result, this will help retailers leverage technology solutions that simplify customer and sore employee experiences. The company focuses on supporting retailers implement and use Store Assist, which allows them to provide seamless omnichannel experiences including pickup, delivery, etc.
The company was able to deliver $18.2 billion in FY23 revenues with sector-leading growth of 15.4% in constant currency and operating margins of 21.0%. Its growth was broad-based across industry verticals and geographical regions. Digital made up 62.2% of its overall revenues and grew at 25.6% in constant currency. FCF conversion came in at 95.7% for 4Q.
For FY24, the company anticipates revenue growth of 4%-7% in constant currency and operating margin of 20%-22%. Moving forward, the company’s operating margins are expected to be supported by cost optimization and operational efficiencies. Strong collections by the company should help its free cash generation.
5. Amazon.com, Inc. (NASDAQ: AMZN)
Amazon.com, Inc. (NASDAQ: AMZN) is a leading online retailer and has organized its operations into 3 segments: North America, International, and Amazon Web Services (“AWS”).
In the first quarter ended March 31, 2023, the company’s net sales saw a growth of 9% year-over-year to $127.4 billion. In 2Q23, the company’s net sales are expected to be in the range of $127.0 billion-$133.0 billion, or to increase between 5%-10% as compared to 2Q22. This guidance expects unfavorable impact of ~30 bps from foreign exchange rates. Operating income of the company should lie between $2.0 billion – $5.5 billion as compared to $3.3 billion in 2Q22. This assumes that no additional business acquisitions, restructurings, or legal settlements are concluded.
6. The Walt Disney Company (NYSE: DIS)
The Walt Disney Company (NYSE: DIS) owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. The company released its earnings for its 2Q ended April 1, 2023. Revenues for the quarter and six months saw a growth of 13% and 10%, respectively.
It made several accomplishments in 2Q, including the improved financial performance of its streaming business, which exhibits strategic changes it has been making throughout the company to realign Disney for sustained growth and success. Cash provided by operations went up by $706 million from $1,556 million in the prior-year period to $2,262 million in the current period. This increase stemmed from higher operating income at Disney Parks, Experiences and Products, offset by lesser operating income at Disney Media and Entertainment Distribution.
7. PayPal Holdings, Inc. (NASDAQ: PYPL)
PayPal Holdings, Inc. (NASDAQ: PYPL) offers electronic payment solutions to merchants and consumers, with a focus on online transactions. PayPal Holdings, Inc.and KKR announced the signing of an exclusive multi-year agreement for a €3 billion replenishing loan commitment. Under this, private credit funds and accounts managed by KKR will buy up to €40 billion of buy now, pay later (BNPL) loan receivables originated by PayPal in France, Germany, Italy, Spain, and UK.
In 1Q23, the company saw total payment volume (TPV) of $354.5 billion, growing 10% year-over-year and 12% on an FX-neutral basis. Net revenues of the company came in at $7.04 billion, exhibiting 9% growth.
For 2Q23, its net revenues are anticipated to grow ~6.5%-7% on a spot basis and ~7.5%-8% on FX-neutral basis. Its 2Q23 GAAP EPS is expected to be in the range of $0.81-$0.83 and non-GAAP EPS should grow 24%-26% to $1.15-$1.17. In FY23, its share repurchases are expected to reach ~$4 billion.
8. Mastercard Incorporated (NYSE: MA)
Mastercard Incorporated (NYSE: MA) is a technology company in the global payments industry which connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide, allowing them to use electronic forms of payment.
The company’s first quarter net income came in at $2.4 billion, and diluted earnings per share (EPS) was $2.47. Adjusted net income of the company was $2.7 billion, and adjusted diluted EPS was $2.80. Results of the company was supported by strong revenue and earnings growth, exhibiting resilient consumer spending and the continued recovery of cross-border travel.
In FY23, the company expects its net revenue to grow by low-teens against FY22 on GAAP basis and its operating expenses should grow by high-single-digits.
9. Visa Inc. (NYSE: V)
Visa Inc. (NYSE: V) is a world leader in digital payments and it facilitates payments transactions between consumers, merchants, financial institutions and government entities.
In 2Q23, its net revenues came in at $8.0 billion, exhibiting an increase of 11% on year-over-basis. Its GAAP net income grew by 17% to $4.3 billion. The company’s strong fiscal second quarter performance was supported by continued focus on its growth levers – consumer payments, new flows and value-added services.
In FY23, its net revenues are expected to be supported by service revenues, data processing revenues and international transaction revenues. Growth in nominal payments volume should support its service revenues, while data processing revenues are expected to be helped by overall growth in processed transactions.
10. American Express Company (NYSE: AXP)
American Express Company (NYSE: AXP) is a global financial institution, operating in ~130 countries, which offers consumers and businesses charge and credit card payment products.
The company reported first-quarter net income of $1.8 billion, or $2.40 per share against net income of $2.1 billion, or $2.73 per share, a year ago. Its quarterly results were supported by strong growth in Card Member spending and continued high engagement with its premium products. Card Member spending went up by 16% on an FX-adjusted basis. Travel and Entertainment spending was particularly strong, increasing 39% on an FX-adjusted basis. American Express Company acquired 3.4 million new cards during 1Q, with U.S. Consumer Platinum and Gold, U.S. Business Platinum, and Delta co-brand account acquisitions all touching record levels.
For FY23, it anticipates year-over-year revenue growth to come between 15% – 17% and EPS to be in the range of $11.00 – $11.40. For FY24, revenue growth should be in excess of 10% and EPS growth in mid-teens.
Conclusion
Despite predictions regarding impending recession since mid-2022, US economy has not exhibited any signs of a downturn if we see the trend of past 9 months. Factors like higher interest rates, high inflation, an inverted yield curve, etc. have all been cited as potential triggers. The Fed ‘s recession probability indicator suggests 68.2% chance that US recession will occur within the next year. This value is at its highest level in over four decades. Other economic indicators have been indicating warning signs too.
However, despite these factors, the labor market in the US stayed strong. The US economy plays the role of an engine supporting global economic growth, and its influence on financial markets and trade is well-known. Therefore, investing in some financially-sound companies for the long-term should bear fruit.
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