Finding the right cheap large-cap stocks to buy can be a challenge.
As we enter 2023, the macro issues that have defined the last year continue to persist: inflation remains high, interest rates keep climbing, as does the risk of a recession. Yet while overall market sentiment remains deeply negative, there is an opportunity to seize, with cheap large-cap stocks to buy.
Not only has it been speculative and growth-focused stocks that have hit lower prices following the latest rounds of market volatility. Even more defensive names, as well as stocks benefiting from current trends (like commodities stocks) have become cheap large-cap stocks to buy.
This has created the ability to scoop up many high-quality large-cap stocks at very favorable valuations. Made cheaper by external factors, once these issues clear up, these undervalued but fundamentally superior stocks are well-positioned to make a rapid recovery.
That’s the story here, with these seven cheap large-cap stocks to buy. Earning either an A or B in Portfolio Grader, consider now a great time to enter/add to a position.
Eli Lilly (LLY)
Pharmaceutical company Eli Lilly (NYSE:LLY) is up 35% as 2022 ends. But it’s in a bit of a lull now that the company issued 2023 guidance that was lower than analysts’ expectations.
Lilly is expecting adjusted earnings per share between $8.10 and $8.30, while the consensus estimate from analysts comes in at $9.16, making one of the cheap large-cap stocks to buy.
However, Lilly has a strong pipeline of drugs that should continue to boost profits, including diabetes drug Mounjaro, which may also get federal approval for use as an obesity drug. That could push annual drug sales just for that drug to $25 billion.
As I wrote recently in a deep dive on LLY stock, Lilly should remain a solid choice for 2023, making this an ideal time to pick up shares. LLY stock has an A rating in the Portfolio Grader.
While some saw it as a sign of weakness, investors should consider the cutbacks as a way of trimming costs and getting a little more efficient.
Pepsi stock is up 5% in 2022 but has been slightly in the red in the fourth quarter as concerns deepen that the U.S. is inching closer to a recession. But Pepsi also has a history of withstanding economic downturns. And with a beta lower than 1, it moves slower than the S&P 500, which is meaningful if you’re expecting the market to slide in 2023.
Pepsi posted revenue in the third quarter of nearly $22 billion, which was an increase of 8.8% from a year ago. It also topped analysts’ expectations for the top and bottom line by reporting EPS of $1.97. Analysts had expected revenue of $20.81 billion and EPS of $1.85.
PEP stock pays a dividend yield of 2.2% and has a B rating in the Portfolio Grader.
Discount retailer Walmart (NYSE:WMT) is an ideal stock to buy particularly with high inflation and growing concerns about a possible recession.
Walmart is everywhere – with $459.5 billion in revenue in the U.S. in 2021, it’s the biggest retailer in the country. Millions of shoppers count on Walmart every day to help stretch their dollars not only for food and cleaning supplies but also household items.
Walmart is down about 2% over the last year, including a 7% drop in the last month. But Walmart is also continuing to do well in its quarterly earnings report. For Q3, it posted revenue of $151.46 billion and EPS of $1.50, besting expectations of $146.8 billion and EPS of $1.32.
As long as Walmart continues to show regular revenue growth and topping analysts’ expectations, WMT stock will be a solid choice. It has a B rating from the Portfolio Grader.
Visa (NYSE:V) stock hasn’t had a great 2022. The stock is down 5% for the year and that’s even after bouncing 14% higher in the final quarter.
But as household debt climbs in the U.S., thanks to inflation, credit card use is on the rise. Credit card balances increased by 15% in the third quarter as people use them to make ends meet or finance purchases, Visa stock is looking stronger in 2023.
Currently Visa has roughly 3.9 billion cards in circulation, processing more than 255.4 billion transactions. With credit card use on the rise and people carrying higher balances, Visa should see its revenues jump accordingly. Revenue for the fiscal fourth quarter included revenue of $7.79 billion, beating expectations for $7.55 billion. EPS of $1.93 per share was 6 cents better than expected.
V stock has a B rating from the Portfolio Grader.
Exxon Mobil (XOM)
Multinational oil and gas companies like Exxon Mobil (NYSE:XOM) had a great 2022 as oil and natural gas prices jumped following Russia’s invasion of Ukraine.
Exxon stock rose more than 75% in 2022, and continued in the last half of the year even when the price of oil finally began to fall.
Concerned that XOM stock is close to topping out? I don’t think that’s going to happen. Exxon unveiled its plan to keep capital spending to between $20 billion and $25 billion a year, which it hopes will allow earnings by 2027 to double what they were in 2019. Exxon plans to use its increased earnings for share repurchases and dividends.
Already, XOM stock pays a solid dividend yield of 3.3%, which is particularly impressive considering how much the stock price rose in 2022. It’s a solid bet that XOM has more in store to please investors in 2023 and beyond.
Exxon has an A rating in the Portfolio Grader.
UnitedHealth Group (UNH)
Minnesota-based UnitedHealth Group (NYSE:UNH) is the largest health insurance company in the U.S. It includes the Optum segment, which has more than 129 million customers, and the United Healthcare segment, which has more than 51 million members.
It’s been a great business for UNH shareholders. UnitedHealth Group stock is up 5% on the year – a great return considering how long the greater market has been in the red. Revenue in the third quarter was $80.89 billion, which was an increase of 11.8% from a year ago and beat analysts’ expectations of $80.54 billion. EPS of $5.79 was better than expectations of $5.44.
UNH stock has a B rating from the Portfolio Grader.
One of the best things about Broadcom (NASDAQ:AVGO) stock is that it puts investors in a good position to invest in 5G technology. Based in San Jose, California, Broadcom designs and develops semiconductors for the wireless and broadband communication industry.
5G is a game-changing technology because it allows people using Wi-Fi to have internet speed and connectivity as if they were using a high-speed cable. Sure, 5G will let you do fun things like stream video pretty much anywhere, open the door for AI and virtual reality, and make it easier to watch sports and wager. But when you consider how 5G opens the door to smart cities, machine learning, virtual medical appointments and remote work, and then you get an idea of what Broadcom’s semiconductors help bring to the table.
Earnings in the fourth quarter included revenue of $8.93 billion, which was 20.5% better than a year ago and just over analysts’ expectations of $8.9 billion. EPS of $10.45 was better than the $10.28 analysts expected.
AVGO stock is up 17% over the last three months. It has a B rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in AVGO, PEP, UNH, V and XOM. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.