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Top Financial Stocks To Invest In Right Now

The stock market may be experiencing some volatility as it continues to push up against new highs, but that doesn’t mean there aren’t some good values still to be found. A rising market tide lifts all boats, but some stocks are sporting supremely discounted valuations anyway.

Although waiting for a major correction would give you a chance to find more stocks with cheap valuations,here are three companies that are bargains right now.

Top Financial Stocks To Invest In Right Now: Wal-Mart Stores, Inc.(WMT)

 Investors looking for the perfect stock during retirement should aim for a relatively stable company with competitive advantages that’s returning consistent value to shareholders. Few companies can claim to do those things as well as Walmart and over the past decade Walmart has consistently repurchased shares and increased its dividend.

While Walmart’s dividend increases have slowed recently as the company made key acquisitions, its fiscal year 2019 increase to a quarterly $0.52 dividend is still a healthy 2.4% yield. It was the 45th consecutive year the company increased its dividend and during fiscal 2018 the retail juggernaut returned a staggering $14.4 billion to shareholders in the form of dividends and share repurchases – rest assured, Walmart will consistently return value to shareholders.

Walmart has also made smart moves to invest in its future, especially its 2016 Jet.com acquisition and 77% stake in Flipkart in May. Initially, the investing community believed that Walmart vastly overpaid for Jet.com, an unproven e-commerce business, in a desperate attempt to do something with its online sales. It took barely a year for investors to come around to its e-commerce moves, and Morningstar.com estimates Walmart can grow online sales 35% annually to boost online sales from 5% of total sales during fiscal 2018 up to around 15% within three to four years.

With more than 11,700 stores in 28 countries and 2018 revenue of $500 billion, Walmart is a powerhouse in scale, pricing power, and distribution. Don’t be surprised if it’s one of a few, if any, that will challenge Amazon.com with e-commerce and grocery delivery. In the meantime, it will continue to dish massive value to shareholders through dividends and share repurchases.

Top Financial Stocks To Invest In Right Now: Magellan Midstream Partners L.P.(MMP)

Magellan is a large and diversified midstream partnership. While it doesn’t produce oil, it is a vital cog in the oil industry, helping to move the energy source from where it is produced to where it eventually gets used.

The partnership is among the most financially conservative players in the midstream space. Its debt-to-EBITDA ratio is at the low end of the industry and its distribution coverage is currently being targeted at a solid 1.2 times. Add in a business that is over 85% fee-based and the partnership’s generous 5.5% yield looks easily sustainable. That’s the core reason why income investors should like Magellan right now — a large and safe distribution.   

However, the midstream partnership also has plans to spend roughly $1.7 billion on capital projects between 2018 and 2020 (with additional projects waiting in the wings). Most of these projects either have customers lined up or are at facilities where demand indicates a need for expansion. In other words, Magellan is also taking a conservative approach to its growth spending. These capital outlays, meanwhile, should support distribution growth of as much as 8% a year through 2020. 

A little history adds even more allure here. Magellan has increased its distribution every quarter since its IPO — including right through the deep energy downturn that started in mid-2014. Magellan tends to trade at a premium to its peers, but remains around 20% off of the highs it reached when oil prices were peaking. With oil coursing through its midstream veins, Magellan is a name that conservative income investors should be looking at very closely today.   

Top Financial Stocks To Invest In Right Now: Exxon Mobil Corporation(XOM)

The energy sector has seen a lot of volatility in recent years, with oil prices having plunged from triple-digit levels all the way down below the $30-per-barrel market before rebounding convincingly. Yet crude oil hasn’t regained all of its lost ground, and nervousness about the tenuous nature of the energy market’s recovery has left even shareholders in industry stalwart ExxonMobil unconvinced about the industry’s future.

Even as the oil giant’s dividend has continued to rise, share prices at ExxonMobil have dropped, and that’s been enough to give the stock an attractive 4.1% dividend yield right now.

ExxonMobil’s major stumbling block has been that it has had increasing difficulty finding ways to replace production, having fallen behind some of its most prominent rivals in pursuing new lucrative projects. The oil giant has long been an industry leader, and it has the financial capacity and determination to use its position as leverage to get involved in deals that smaller companies can’t afford to pursue. 

It could take a while for ExxonMobil’s earnings results to catch up to its ambitious plans, but eventually, the company is in a good position to make good on its strategic promises to its core investors.

Top Financial Stocks To Invest In Right Now: LGI Homes, Inc.(LGIH)

I’m overgeneralizing a little bit, but most new homes can be lumped into three distinct categories: starter homes, move-ups, and luxury. Most homebuilders will have a blend of these homes in their inventory, a few will focus on the luxury market, but LGI Homes focuses pretty much exclusively on the starter home market and has built its business to specifically cater to the demographics of these customers.

LGI is much more of a no-thrills builder than its peers. It doesn’t offer several premium package options like kitchen or bathroom upgrades or several different architectural designs. Instead, it focuses on a few more cookie-cutter designs that can be built relatively quickly and keep costs down such that LGI can sell more affordable homes. The company also targets land purchases, lot purchases, or lot agreement contracts in places that are away from metro areas but have easy access to highways and are close to retail and employment centers. This buying strategy is also a way to provide a lower price point on entry homes. 

Management also uses a more targeted marketing approach to reach its buyer demographic. It specifically seeks out first-time buyers and renters with its marketing campaigns that offer move-in ready homes that don’t require a down payment and offers them at comparable rates to rentals in the area with the possibility of building equity. It has been an incredibly successful tactic, as new homes sold has increased 10 times over the past decade.

LGI isn’t without flaws. It carries a rather high debt load compared to its peers, and targeting buyers with no down payment might give some investors the chills because of potentially questionable customer creditworthiness. These two things suggest that if we were to see a housing market swoon, LGI Homes could be one of the first to suffer.

The one thing I can say to assuage these concerns is that LGI Homes was one of the few homebuilders to remain profitable every year since 2003, so management has handled a tough market crash before. Also, there is a lot of pent-up demand from millennials putting off their first home purchase, and high housing prices in the conventional markets are likely going to push first-time buyers into these more friendly price-point abodes. With shares of LGI trading at just 10.7 times earnings, LGI stock could be a great pickup.

Top Stocks To Watch For 2019

Big things usually have small beginnings. That’s certainly the case with wind power in the United States. At the turn of the century wind farms contributed a negligible amount of electricity to the grid. But that changed as the technology and economics improved. Wind power’s share of American electricity generation jumped to 1.5% by 2008 and 6.3% by 2017. It’s poised to send more electrons to the grid than hydropower before the end of the decade.

While the exponential growth demonstrated by wind power has made some long-term investors wealthy, there are parallels to other renewable technologies earlier in development. And these days companies are learning that prioritizing environmental stewardship can be great for business, too. With that in mind, here are 10 stocks that can help your portfolio while helping the environment.

Top Stocks To Watch For 2019: Magellan Midstream Partners L.P.(MMP)

Magellan Midstream Partners (NYSE:MMP) is one of the best master limited partnerships(MLPs) around. The oil and refined products pipeline and storage company boasts one of the top credit ratings and financial profiles in the sector. As a result, the company’s 5.6%-yielding distribution is on rock-solid ground.

That level is worth noting because it’s at its highest since the financial crisis thanks to a nearly 14% sell-off in Magellan’s unit price over the past year. That decline came despite solid financial results, enabling the company to keep increasing its payout. In fact, Magellan Midstream expects to raise its payout another 8% this year and at a 5% to 8% annual rate in 2019 and 2020, all while maintaining its top-tier financial metrics. With that growth now coming at a cheaper price, April looks like an excellent time to think about scooping up this outstanding income-focused stock.

Top Stocks To Watch For 2019: Verizon Communications Inc.(VZ)

Verizon Communications Inc. (NYSE:VZ), it pays a generous dividend – but doesn’t raise it meaningfully. This lack of payout upside caps the stock’s price upside.

Frustrated Verizon investors need not look further than this chart for an illustration of why their money is underperforming.

Verizon’s stock and dividend have increased by roughly the same amount. That’s no coincidence – it happens all the time.

You’ll also notice that the firm’s track record of “yearly dividend raises” means little because the raises themselves weren’t meaningful.

This a common mistake dividend aristocrat fans make when they flock to track records. They’re not that far off the scent of 100%+ gains, however. They just need to look ahead, rather than behind. Let me explain.

Top Stocks To Watch For 2019: Callaway Golf Company(ELY)

Callaway is one of the largest golf apparel and equipment companies in the world, manufacturing respected gear for both professionals and amateurs. The stock is currently sporting a Zacks Rank #2 (Buy), as well as an “A” grade for Momentum. This is an interesting pick for those looking to ride a recent trend, as shares have surged more than 18% in just three months. This momentum is inspired by the company’s recent earnings beat and positive revision activity. ELY’s consensus EPS estimate for 2018 has gained 10 cents over the past week, and Callaway is now expected to see earnings growth of 51% this fiscal year.

Top Stocks To Watch For 2019: Five Below, Inc.(FIVE)

The retail industry might be the last place you’d expect to find a growth stock right now. Mall-based retailers are facing huge challenges as many of the anchor store chains that help drive traffic to mall locations have resorted to extensive store closings in the face of lack of shopping interest. That’s forced smaller retailers to come up with better business models in an effort to survive.

Five Below has come up with what it thinks is an unbeatable combination of favorable traits to appeal to shoppers: inexpensive goods that teen and pre-teen shoppers can afford and want to buy. Even as the retail industry overall has struggled, Five Below has seen impressive revenue growth, with top-line gains of 28% last year and 20%, 22%, and 27% in the three years before that.

After years of little movement, Five Below stock has recently exploded higher as many investors have started to recognize the tween retailer’s resilience in a bad market. With a solid e-commerce presence to go with an impressive network of well-placed store locations, Five Below has its finger on the pulse of the youngest generation of shoppers. That could give the chain a leg up for years to come, especially as it hopes to nearly triple the size of its network over the long run.

Top 5 Cheap Stocks To Invest In 2019

Investing in the stock market is the surest way to build long-term wealth. Diversification among companies, industries, and types of securities is the key to ensuring that investors can reach their goals. Technology stocks can provide a boost to returns, as these companies are often on the cutting edge, making groundbreaking discoveries that change our everyday lives.

With that in mind, we asked three Motley Fool investors to choose top companies they believe to be offering compelling opportunities in the tech sector. They provided convincing arguments for these stocks.

Top 5 Cheap Stocks To Invest In 2019: Southern Company (SO)

 No list of retirement stocks to mull would be complete without at least one utility stock. Even when times are tough, consumers find a way of keeping the lights on.

One of the best-of-breed choices among utility stocks is Southern Co (NYSE:SO), which serves nine million customers, mostly in the southern part of the United States.

Delivering electricity isn’t a simple or a cheap business, to be fair. In fact, cost overruns and delays at a couple of new facilities helped send SO shares to new 52-week lows last week. They’re just temporary headwinds though, which Southern has shrugged off before. In the meantime, the pullback has driven the well-protected dividend yield up to 5%, which is better than the industry’s current average.

Top 5 Cheap Stocks To Invest In 2019: RealNetworks, Inc.(RNWK)

RealNetworks Inc (NASDAQ:RNWK) is the company that launched RealPlayer, a digital music service, back in the bygone dotcom era.

And it had a quite a run back then.

But the music and media business has been challenging, with new players gaining attention of younger listeners, and new platforms leapfrogging over older ones as Gen Zs choose new options.

To its credit, RNWK has stayed in the game, adapting to new technologies and finding ways to remain relevant in the cloud, with messaging and mobile. But the stock continues to wither, off 22% in the past year, and that’s after a continued slide over the years.

It lost its traction years ago and can’t seem to get it back.

Top 5 Cheap Stocks To Invest In 2019: Control4 Corporation(CTRL)

Pretty much everything is getting smarter these days. Smartphones, smart cities, just about smart everything. It only makes sense that smart homes will likely become more and more a part of our lives in the coming decades. That’s great news for investors of Control4 Corp., a provider of smart-home products and solutions.

Control4 rocketed 191.8% higher in 2017 before taking a breather and giving up some of those gains in 2018. However, the stock popped 13% on May 4, after releasing first-quarter results that included 18% revenue growth and beat estimates on both the top and bottom lines. Control4 has plenty of room to grow considering management believes it has penetrated less than 2% of the 17.2 million U.S. households that generate over $150,000 annual income. Here’s the kicker: Its international opportunity is even larger, and largely untested by the company thus far. 

One intriguing path for Control4 to grow, in addition to its rapid organic growth, is by acquisitions. It’s already successfully acquired and integrated five companies. And with no debt on the balance sheet, it’s in a great position to strike if it finds a business that fits its business model and can accelerate growth. Management must capture more of the wealthy households in the U.S., expand its product lineup to increase sales from its customers, and expand internationally when the time is right. If those things are achieved, Control4’s growth is just getting started.

Top 5 Cheap Stocks To Invest In 2019: Tuesday Morning Corp.(TUES)

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Dallas-based Tuesday Morning Corporation(NASDAQ:TUES) has become one of many retailers which have struggled to stay profitable in a changing retail environment. Founded in 1974, the company expanded across the country, operating in 41 states by 2001. During the past few years, the company has been plagued by high turnover in its top management and struggled to remain profitable.

Still, the company operates 724 stores across the U.S., which by itself should make it one of the hot penny stocks. Moreover, revenue grew by 10% in its latest quarterly report. Comparable store sales rose by 9.1% in Q1 as well. Investors should also note that the company relocated 58 stores in the last 12 months. At those stores, sales grew by 65%. This latest report held many encouraging signs for the company.

However, given that analysts expect net losses for both the current year and the year after, investors should still treat this stock as speculative.

Still, a stock price in the $3.30 per share range and a market cap of about $140 million seems low for a company with 724 stores. Traders should also keep in mind that this stock traded at over $22 per share in late 2014. If management can maintain revenue increases and return TUES stock to profitability, those who buy now could enjoy outsized gains from a dramatic comeback.

Top 5 Cheap Stocks To Invest In 2019: Magellan Midstream Partners L.P.(MMP)

This company is among the most conservatively run midstream oil and natural gas players. Its debt-to-EBITDA ratio is well below industry bellwethers like Enterprise Products Partners L.P. and Kinder Morgan, Inc. And it avoids dilutive unit issuance, with its unit count effectively flat over the past five years compared to a roughly 17% rise at Enterprise.

With Magellan’s price down roughly 33% from 2014 highs, it’s a good time for investors to pick up an industry-leading name on the cheap. But why the sell-off?

The answer is that investor sentiment on the midstream space has turned negative, with the Alerian MLP ETF down 50% from its highs. The negative shift isn’t unreasonable, as some midstream players are highly leveraged and a number have been forced to trim distributions. But neither of those issues apply to Magellan, which has increased its distribution every quarter since its IPO in 2001.

MMP Average Diluted Shares Outstanding (Quarterly) Chart

MMP AVERAGE DILUTED SHARES OUTSTANDING (QUARTERLY) DATA BY YCHARTS.

More important for the future, Magellan plans to keep increasing distributions between 5% and 8% a year between now and 2020 while maintaining robust distribution coverage of 1.2 times. The key is its pipeline of capital investments. But Magellan doesn’t build on spec, it only risks its unitholders’ money when it has a good reason to do so.

For example, of the roughly $1.2 billion in spending planned for this year and next, virtually all of the projects have customers lined up, which clearly illustrates a need for expansion at existing assets. As an industry standout, Magellan is a solid option for any investor.