For today’s group of stocks I wanted to run a screener for large cap stocks that are currently trading for less than $30.
A lot of investors prefer to trade only large cap stocks because they have proven an ability to grow and navigate through the growing pains that all companies face a they rise from small to mid to large cap entities.
The market remains strong, but there are still plenty of unknowns that could lead to another sell off like the one traders experienced in December. There is uncertainty over the impact of last year’s interest rate hikes, uncertainty over the ongoing trade war between the U.S. and China, and fear that the Trump tax boost is running out of gas.
With so much uncertainty I prefer to turn to large cap stocks for a little extra security just in case the market does turn lower. Here are my five favorite large cap stocks under $30.
Williams Cos. (WMB)
Williams Companies (WMB) is an energy company with a focus on pipelines. The stock is currently trading at $28.50 with a yield of 5.2%. Williams has struggled to grow earnings in recent years, with profits down 0.7% per annum over the last five years, but analysts see improvements in the future and forecast earnings average annual earnings growth of 9% over the next five years. The stock has a slightly high forward P/E of 26, but if it can consistently hit its targets moving forward the market will push shares higher. The U.S. shale boom should keep demand high for the company’s pipelines and drive the stock moving forward. WMB last reported earnings mid-February with weaker than expected earnings but the market did not sell the stock off, and after a short sideways move shares have moved higher over the last six weeks. Analysts have an average price target of $32.00 on the stock.
Advanced Micro Devices (AMD)
Advanced Micro Devices (AMD) is a semiconductor company. Like most stocks in the sector, AMD sold off in the latter part of 2018 due in part to concerns over the ongoing trade war between the U.S. and China which does pose a threat to chip demand moving forward. As negotiations have progressed between the two nations strength has returned to the sector. After falling as low as $16.02 in late December, AMD has rallied and is currently back to $27.33 and in a strong upward trend. Earnings growth has been strong, with profits up 32% per annum over the last five years. Looking ahead analysts forecast annual earnings growth of 34% for the next five years. Barring a breakdown in trade negotiations AMD should continue to build on its recent gains and analysts have an average price target of $28.59 on the stock.
Manulife Financial (MFC)
Manulife Financial (MFC) is a life insurance company. The stock sold off in the latter part of 2018 along with the overall market, but after shares hit a 52-week low of $13.33 in December the stock has made a strong recovery back to $18.18 and continues to move higher. Even with the recent rally shares remain very attractively priced with a forward P/E of just 8.2 and the stock has a current yield of 4.3%. The insurance provider has shown solid earnings growth in recent years at an annual rate of 14.4% over the last five years and analysts expect profits to rise at an annual rate of 8.8% the next five years. Analysts have an average price target of $21.47 on the stock.
AES Corp. (AES)
AES Corp. (AES) is a diversified utility company. Like most utility stocks, AES has an attractive capital program and is currently yielding 3.0%. AES did run into a little selling pressure during the December market correction, but the selling was quick and the stock quickly regained its upward momentum and is now trading just pennies below its 52-week high at $18.12. The stock is trading at just 10 times earnings and profits are forecast to rise 7.6% per annum over the next five years. AES posted a positive earnings surprise in February and the company will next report earnings on May 7 with a consensus of $0.32 per share versus $0.28 during the same period last year. Analysts have an average price target of $16.70 on the stock but if the company is able to deliver another positive earnings beat you can expect to see those targets revised upward to allow the stock to build on its recent gains.