With about a month before Jolly Old St. Nicholas starts dropping his goodies down chimneys around the world, it’s time to strategize with stocks to buy for Christmas. No, it’s not just about the so-called Santa Claus rally, though this seasonal phenomenon can certainly help. Rather, ahead of a possibly dynamic market environment, we need to consider multiple angles.
For the stocks to buy now, I’m going with a diverse list: we’re hitting boring but fundamentally reliable enterprises, dividend providers, compelling growth stories and one risky but possibly stratospheric idea. This way, we’re not limited to any one set of ideas but can approach the unknown with a wide canvas.
Other than that, I believe the directive is self-explanatory. So, without further delay, below are stocks to buy for Christmas.
Colgate-Palmolive (CL)
When it comes to reliable stocks to buy now, it doesn’t get much more boring than Colgate-Palmolive (NYSE:CL). Specializing in toothcare and cleaning products, Colgate-Palmolive features myriad other product categories, including deodorants, skin care and even premium pet food. Given how much Americans love their pets – even under duress – CL simply makes sense for risk-averse investors.
That’s not to say that CL is immune to red ink because that’s obviously not the case. Since the start of this year, CL lost more than 2% of equity value. However, it’s been making a comeback in the trailing month, swinging up more than 7%. Bolstering sentiment was the company’s solid third-quarter earnings print.
Specifically, earnings per share hit 86 cents, beating the consensus target of 80 cents. Also, revenue landed at $4.82 billion, above the expectation of $4.7 billion. Fundamentally, the performance should continue as people aren’t going to stop brushing their teeth anytime soon.
Analysts peg CL a moderate buy with an $81.57 price target. Combine that with its passive income and you have a confidence booster for stocks to buy.
Kroger (KR)
As a grocery store giant, investors shouldn’t expect to get rich off of Kroger (NYSE:KR). Rather, the narrative here centers on its predictable and consistent business. Yes, Wall Street chases the latest innovations, such as artificial intelligence. However, no matter the advancements in technology, humans need to eat. And Kroger facilitates this necessity at relatively cheap prices.
Indeed, that’s why I continue to label KR as a beneficiary of the trade-down effect. If you’re concerned about a recession – and that’s a non-zero-probability event – then Kroger should be on your list of stocks to buy now. Almost immediately, I believe, consumers will trade down from expensive restaurants and food-delivery services to cooking at home. And that basically means more demand for Kroger.
In the meantime, the company is holding down the fort. In terms of earnings performances, the company enjoys a solid track record. So, I’m not expecting negative surprises when management discloses Q3 results.
Analysts rate KR a moderate buy with a $52.75 price target, projecting over 20% upside.
Coca-Cola (KO)
Moving onto enticing dividend providers, Coca-Cola (NYSE:KO) also fundamentally benefits from the trade-down effect. Right now, consumers generally are willing to reach into their pockets for spending on discretionary items or services. However, if economic troubles continue to apply pressure, those trips to fancy coffeeshops will likely decline. In their place, folks will probably turn to the grocery aisle.
And that of course is where Coca-Cola dominates. By offering caffeinated products at a can’t-beat price-for-value proposition, KO seems an attractive idea. No, you’re not likely to get rich off KO. However, I’d definitely put it on my list for stocks to buy for Christmas. You’re basically combining a powerhouse brand with rising relevance.
As for its passive income, Coca-Cola offers a forward yield of 3.15%. In addition, the company commands 61 years of consecutive dividend increases, a wonderful attribute ahead of market uncertainties. Analysts anticipate that shares will reach $63.76, implying over 9% growth. With the yield, you’re looking at a solid idea.
IBM (IBM)
With all eyes on technology – and for good reason given the dramatic performance of enterprises like Nvidia (NASDAQ:NVDA) – you’d think that a legacy innovation juggernaut like IBM (NYSE:IBM) would attract attention as an underappreciated hidden gem. And for much of 2023, you’d be wrong. However, I’ve long felt that investors are overlooking the tremendous acumen that Big Blue brings to the table.
Well, finally, investors are starting to notice (I guess). Since the start of the year, IBM has gained almost 10%, which isn’t the remarkable part aside from it turning the ship around. Rather, in the half-year period, shares jumped 21%. That’s quite conspicuous for the legacy tech giant, which in recent years hasn’t moved much.
However, with its myriad specialties AI, machine learning, cybersecurity and even the blockchain, IBM has a lot to offer. Speaking of which, the company also delivers a forward yield of 4.28%. While the payout ratio is a bit elevated at 66.6%, IBM enjoys 28 years of consecutive dividend increases. Analysts have also changed their tune to a moderate buy.
Intel (INTC)
At first glance, Intel (NASDAQ:INTC) might seem too hot to touch. It’s not just about the stock’s 63%-plus increase on a year-to-date basis. Instead, it’s the recent acceleration. In just the trailing one-month period, INTC rocketed up 29%. In fairness, the company delivered the goods for its Q3 earnings report.
Specifically, Intel posted EPS of 41 cents, beating out the consensus target of 22 cents. On the revenue front, the tech giant’s tally of $14.16 billion exceeded expectations calling for $13.58 billion. However, analysts remain unconvinced. As of the latest read, INTC carries only a hold rating. This assessment breaks down as five buys, 18 holds and four sells.
Even uglier, the average price target sits at $37.39, implying a 14% downside risk. So, what’s driving the disconnect between the technical performance and the fundamental skepticism? My argument is that the bears are covering their short position, especially their sold calls.
As I explained in my TipRanks article, call sellers (writers is the proper term) can lose a ton of money if circumstances go bad. That’s why for speculators, INTC could be one of the stocks to buy now.
Crocs (CROX)
One of the ideas that has been popping up on my radar – and probably yours too – Crocs (NASDAQ:CROX) is a popular footwear company. Manufacturing a distinct brand of foam footwear, the company refers to its products as “clogs.” They’re very comfortable from what I understand and CROX represented a pandemic winner.
However, circumstances have turned a bit sour lately. Since the January opener, CROX dipped more than 12% of equity value. Still, the red ink sparked dialogue that CROX could be one of the stocks to buy for Christmas because of the value proposition. From what I can see, the bulls are right.
Currently, shares trade hands at only 7.97x forward earnings. In contrast, the sector median for the apparel manufacturing space clocks in at 11.86x. Also, its price/earnings-to-growth (PEG) ratio sits at a subterranean 0.09x. Usually, a 1x reading indicates fair value.
It doesn’t appear to be a value trap either given the outstanding three-year revenue growth rate of 49.5%. Analysts emphatically argue that CROX represents one of the stocks to buy now.
Identiv (INVE)
Okay, so for the last idea for stocks to buy, let’s get speculative with Identiv (NASDAQ:INVE). According to its website, Identiv is a global digital security and identification leader for the Internet of Things. It features a range of security and physical access control solutions, including video intelligence and ID confirmation protocols.
Primarily, Identiv supports critical infrastructure such as airports and government facilities. But it’s not just limited to traditional access control endpoints. Instead, it offers solutions for healthcare facilities such as badging and compliance procedures as well as for the education sector, particularly in the realm of campus security. Given the increasing challenges in society, Identiv offers tremendous relevance.
However, a lackluster performance in Q3, which saw the company post a loss per share of 1 cent along with a revenue haul that missed the consensus view by 6%, hurt INVE. Still, the critical need that Identiv fills could make it a worthwhile long-term speculation. Analysts say it’s a unanimous strong buy with a $9 target, making it one of the stocks to buy for Christmas.
On the date of publication, Josh Enomoto 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.