Congress averted disaster by passing a short-term spending bill a couple of weeks ago, which averted a government shutdown. With the crisis averted and the choppiness in the financial markets, investors can now breathe a sigh of relief and hope for a more prosperous road ahead.
Shutdowns typically occur when Congress runs into funding issues with the government, leading to service closures and employee layoffs, thereby weighing down the economy. Investors are incredibly worried about the economic fallout, creating market instability. The avoidance of the Oct. 1 shutdown is heartening for the stock market, with investors having one less thing to worry about. It also signifies Congress’s commitment to working together to sustain government operations. With that said, let’s look at three stocks to buy for robust long-term gains ahead.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) is first on the list of stocks to buy after an averted government shutdown. It has established a leadership position in the realm of AI-driven data analytics, brandishing a stellar return of more than 170% year-to-date. Its financial exuberance is painted by a strong 13% spike in second-quarter revenue to $533.3 million and a net income that’s blossomed by 116% to $28.1 million. Moreover, Palantir has notched substantial gains in its government sector, lifting related revenue by 15% to $302 million and propelling international contracts by 31% to $76 million.
Furthermore, its ballooning clientele is mighty impressive, with 161 customers, up 38% from last year’s tally. Additionally, the firm is knitting transformative partnerships, underscored by an imminent alliance with the U.K.’s NHS and a hefty $250 million deal with the U.S. Defense Department. Hence, in this era of technological marvels, Palantir stands out despite a past tinted by the meme stock drama.
Schlumberger (NYSE:SLB) continues to capture investor attention, boasting a leadership position in the realm of oilfield services. This global giant, though steeped in exploration and production (E&P), leans more toward services than drilling theatrics. Consequently, as rising oil prices send firms scurrying into fields, Schlumberger finds richer soil for its service offerings.
Recent earnings have been remarkable, with revenues climbing 20% and EPS leaping by 44% year-over-year (YOY). Moreover, multiple international and offshore endeavors are likely to intensify, particularly with Schlumberger’s potential windfall from Saudi Arabia’s hefty $100 billion drilling budget spanning 2023-2025.
On top of that, with its trailing twelve-month free cash flows at a robust $1.82 billion, the company comfortably blankets its annual dividends surpassing $1.4 billion. This financial muscle, coupled with plans to pivot back into the US onshore services potentially come 2025, cements Schlumberger’s stellar status.
Northrop Grumman (NOC)
Northrop Grumman (NYSE:NOC), a titan in the defense sector, stands as a bellwether investment in its niche and is certainly among the top stocks to buy. Despite a recent downtick in its share price, its robust long-term growth trajectory and a staunch stance on shareholder returns remain mighty alluring. NOC isn’t resting on its laurels; it’s eyeing a twofold surge in free cash flows by 2028, fueled by a shift to fixed-price revenues and a broader global footprint.
This bullish forecast continues to gain traction amidst intensifying geopolitical tides, primarily from behemoths such as China and Russia, necessitating a diversified defense cache. Its second quarter earnings report reinforces this sentiment, showcasing a robust order backlog of $78.8 billion and net awards tallying $10.9 billion.
Not to be overlooked is NOC’s remarkable dividend history with 19 years of unbroken payout growth, coupled with a dividend yield of over 1.7%. In the complex ballet of hypersonics and space exploration, NOC emerges as an excellent long-term pick.
JPMorgan Chase (JPM)
In the high-stakes world of finance, JPMorgan Chase (NYSE:JPM) emerges as a steadfast giant, and it’s probably not surprising to see it on this list of stocks to buy. Esteemed investors such as Warren Buffett flocked to this fortress of stability, drawn by strategic masterstrokes such as the acquisition of First Republic Bank. This financial juggernaut isn’t just sitting pretty on its laurels; it’s making waves with a major upswing in investment banking fees, setting the stage for an enthralling capital allocation narrative.
Moreover, the bank recently made major moves with the strategic securitization of its Chase retail products. This bold step aligns with impending U.S. capital directives while enhancing the agility of its colossal $1.3 trillion loan portfolio. What’s more, this maneuver strengthens capital ratios without sacrificing customer loyalty.
Recent quarters have seen JPMorgan break away from the pack, marking a stellar 34% YOY revenue surge. Beyond these numbers, the bank signals unwavering confidence, rewarding investors with a 2.84% dividend yield and a rosy financial forecast for 2023.
In the tech cosmos, Microsoft (NASDAQ:MSFT) reigns supreme, consistently delivering market-beating returns. The company’s secret is a diversified business arsenal, poised for stability even when economic seas get choppy. Moreover, Microsoft is charging full steam ahead into AI’s brave new world, prepping for the grand debut of its AI chip “Athena” next month.
The second quarter saw Microsoft not just meeting earnings estimates but obliterating them, flaunting a superb operating income of $88.52 billion. This financial prowess isn’t just for show; it’s a testament to its stronghold in burgeoning domains, including AI, cloud, gaming, and cybersecurity. Cloud computing, another jewel in its crown, sees Azure raking in solid revenues, propelling Microsoft to the heart of the AI revolution. Hence, with an unyielding commitment to continual evolution and technological prowess, Microsoft’s market resilience seems unequivocally certain.
Walmart (NYSE:WMT) is a definite when looking at stocks to buy, and it stands out as a bulwark in the retail sphere, making a compelling case as a top defensive stock pick. The company recently marked its 50th consecutive year of dividend growth earlier in 2023, crowning it a new dividend king in the S&P 500. Its commitment is evident with its current quarterly dividend of 57 cents per share, translating to a yield of 1.43%.
However, Walmart’s appeal doesn’t hinge on dividends alone. Its retail prowess is undiminished, fortified by a growing grocery segment and a robust online sales framework. This strategic duality was on full display in its recent quarterly report, with its EPS of $1.84 outpacing the forecasted $1.71. Revenues, too, comfortably exceeded expectations by $2.35 billion, hitting $161.6 billion. The driving force remains a surge in grocery and eCommerce sales, with the latter skyrocketing by 24% compared to the previous year.
Hence, in a marketplace where adaptability is king, Walmart continues to demonstrate its resilience and strategic foresight, making it a potentially lucrative harbor for investors in the current turbulent times.
Lennar (NYSE:LEN) stands as the second-largest homebuilder in terms of home deliveries and is uniquely positioned to tap into evolving homebuyer preferences. It may be last on the list of stocks to buy after avoiding a government shutdown, but it’s certainly not least. Its portfolio is diverse, with operations sprawled across 19 states and homes catering to a wide range of buyers, from first-timers and upward movers to luxury and active adult markets. Significantly, the average price tag on its properties stands at $448,000, a figure comfortably below the national mean.
Financially, Lennar is on solid ground, evidenced by a 4.8% uptick in YOY revenue and a striking 200% leap in operating cash flow. The resilience shines through in its operational metrics, too, with a 6% rise in deliveries to 49,292 and an 8% climb in new orders, crossing the 51,700 mark, all achieved against major headwinds.
While Lennar’s shares have appreciated 21% since the year’s start, they’ve retracted slightly from the July zenith of $133. Additionally, the stock not only promises growth but also rewards shareholders with a 1.4% dividend yield. Echoing this optimism, Tipranks’ consensus nudges a “Moderate Buy” stance, projecting a substantial 31% climb from present levels.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.