With the bull market extending its run into 2017 it’s making more and more investors wonder when the run will end. Everything seems to be selling at all time highs these days.
There has to be some stocks that are selling at a “discount” though. With investors worried about the bull run ending it’s probably smart to look for stocks that are more on the defensive side of things. Stocks with good dividends and good track records. But also, stocks that are trading at a discount right now. Here’s my top three for 2017.
1- Verizon (VZ)
Verizon is the largest wireless communications service provider in the United States. It provides communication services to businesses and consumers alike. Verizon is also in the middle of picking up Yahoo and adding them to their business.
Verizon is acquiring Yahoo to try and expand its business further. Some might call it a bold move for a company that has been slow and steady for years now. Yahoo makes more sense when you account for their AOL acquirement in 2015. Only time will tell if these were good or bad decisions, but with over $125 billion in revenue forecast for 2017 you can be sure that they can afford to take on some risk.
One of the greatest things about Verizon is their solid and reliable dividend that is yielding about 5% right now. Look no further than Warren Buffet for validation that Verizon is a good bet. Buffett’s Berkshire Hathaway has accumulated over 15 million shares in recent years.
Check out the stock’s long term chart too and you’ll notice it’s approaching a support point in the $45 per share range. I’m a buyer around this number.
2- BB&T (BBT)
BB&T is one of the larger financial services company in the US. They’re based in Winston-Salem, NC however they have banks scattered across 15 states.
Some investors might be skeptical of investing in any of the banks. The crash that happened almost a decade ago is still fresh is many people’s minds. A part of the crash had to do with the banks taking on more risk than they should have. If it wasn’t for the bail out who know where the bank sector would be today.
There’s something different about BB&T though. They stayed in the green on profit during the great recession of the past decade. The bigger banks were getting bailed out and the smaller banks were going bankrupt, but BB&T kept chugging along. That alone should tell you something about them.
They also have a solid dividend that is increasingly approaching 3% and rising. They beat out their regional rivals in this category, and stay well in line with the “big banks” of the country when it comes to yield.
Looking at the long term chart of BBT you can see that it could be headed back down to a support level that is around the $40-$42 range. I’m a buyer in this range. The long term chart has resistance in the $40 range all the way back to 1999. In the years before the financial crisis this $40 range turned into support before it was decimated by the crash. It’s back to the $40 range now with the stock’s recent breakout up from the $40 range and the subsequent back down.
If you’re not one to buy because of charts then maybe it’ll convince you to get into a bank stock simply because the Fed plans on raising interest rates higher again this year. Raising rates can quickly turn into profits for the banks that can then turn around and raise rates on their loans. You can then expect your dividend yield to rise with it too.
3- Boeing (BA)
Boeing is in the jets business, most notably, airplanes. They make them from the ground up with their hands in at the beginning of the designs process all the way to when they sell them out to companies. What they do is not simple by any means, but they do have a proven track records of success.
Although the stock is selling at all time highs right now, it’s still a good long term buy. If you’re simply looking at the long term chart you’ll notice that they’ve recently busted out of a 3 year channel.
That’s not the only reason why you should consider Boeing though. Considering that they’re in a business that does well when there’s demand for their products it’s good to know that the amount that people are traveling is rising all around the world. It’s also good to know that Boeing has almost 6,000 orders for jets in the books ready for them to work on as they catch up to the demand. Want a new plane? Then get in line.
It doesn’t hurt that Boeing has been strong and steady with its dividend since 1992. Either keeping the dividend payout the same or increasing it over the years.
So why is Boeing selling at a “discount” when it’s at all time highs?
The reason why it’s at a discount has to do with what it’s projected to do in the next few years. They project that they’ll deliver almost 1000 jets in 2019, and if you compare that with around 750 last year that gives you about a 25% increase in a couple years. That’s a huge increase. They aren’t selling iPhones at Boeing.