With a host of challenges to grapple with, 2021 surely has commenced on an uncertain note. Apart from the newer and more virulent COVID-19 strain, which poses additional threats to the economy and world at large, slowdown in job market recovery (per U.S. Bureau of Labor Statistics’ last updated report released on Dec 4, the monthly employment growth slowed after surging in the prior months) and resurgence in number of cases have kept market watchers on the tenterhooks.
Although the broader economy has been witnessing signs of recovery, the continued uncertainty has resulted in market volatility. This, in turn, has been keeping investors on their toes since the onset of the pandemic.
Despite these hurdles, the market has witnessed one of its best Novembers on record with the hope of full proof coronavirus vaccine rollout getting prominent. The FDA’s emergency use authorization (EUA) of two vaccines in December 2020 and the passing of $900 billion COVID-19 relief package have provided further boost to market sentiment with the rally continuing in the month of December and into 2021.
Moreover, per the latest forecast released by the Federal Open Market Committee (FOMC) meeting, the U.S gross domestic product (GDP) is projected to grow 4.2% in 2021 (before contracting 2.4% in 2020).
Apart from Federal Reserve policymakers’ anticipation that the United States is likely to make a full recovery in 2021, the Central Bank officials have also decided on keeping interest rates near zero, and maintaining its current pace and composition of asset purchases.
Investment Strategy to Bank Upon
It is always prudent to approach investing as a long-term game plan. Given this unpredictable and volatile environment, it is wise to choose companies that are fundamentally strong, and have sustainable and growing dividend yields and trade at relatively low or reasonable prices.
Moreover, with the interest rates hovering near zero, the prospects of investing in stocks with solid dividend yields has increased, making the following stocks attractive picks.
Choosing the Right Stocks
With the help of the
Zacks Stock Screener
we have zeroed in on five stocks which carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a
Growth Score
of A or B. Apart from a favorable Zacks Rank, we have chosen companies with market cap exceeding $5 billion and a dividend yield of more than 3%.
You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Ternium S.A.
TX
, which has a Zacks Rank of 1 and a Growth Score of B, is the leading producer of flat and long steel products of Latin America and operates in two segments — Steel and Mining. The stock has a market cap of $5.71 billion. The company offers a dividend yield of 4.13%.
Over the past year, the stock has returned 33.9% compared with the
industry
’s rally of 20.6%.
Newell Brands Inc.
NWL
designs, manufactures, sources, and distributes consumer and commercial products worldwide. The Zacks Rank #1 company, with a Growth Score of A, has a market cap of $9 billion. It offers a dividend yield of 4.33%.
Over the past year, the stock has appreciated 12.3% compared against the
industry
’s fall of 5.6%.
PLDT Inc.
PHI
offers telecommunications services. Its operating segment consists of Wireless, Fixed Line and Others. The Zacks Rank #2 company, with a Growth Score of B, has a market cap of $6.03 billion. It offers a dividend yield of 3.77%.
Over the past year, the stock has gained 41.7% against the
industry
’s decline of 21.4%.
Rio Tinto Group
RIO
engages in finding, mining, and processing mineral resources worldwide. The Zacks Rank #1 company, with a Growth Score of B, has a market cap of $93.79 billion and offers a dividend yield of 4.12%.
Over the past year, the stock has advanced 28.7% compared with the
industry
’s rally of 24.7%.
Broadcom Inc.
AVGO
designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The Zacks Rank #2 company, with a Growth Score of B, has a market cap of $178.08 billion. It offers a dividend yield of 3.29%.
Over the past three months, the stock has returned 19.6% compared with the
industry
’s rally of 18.1%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?
These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold.
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