There’s never a bad time to buy a good stock. If you can step into a good stock at a discount though, then so much the better. You’ll ultimately secure a larger net return on your invested dollars.
With that as the backdrop, here’s a closer look at three great stocks to buy while they’re on sale. Notice that each one is at least a little unique from the other two. So, it wouldn’t be wrong to jump into all three at these low prices.
A little over a decade ago the idea of hiring individuals driving their own cars to create a fleet of taxis seemed outrageous. Now ride-hailing is not only commonplace, but industry pioneer Uber Technologies(NYSE: UBER) is consistently profitable, and increasingly so.
More of the same is on the way, too. This year’s expected top-line growth of 17% should be followed by 16% growth next year, with per-share earnings projected to improve at an even faster clip.
This is still only the beginning, however. Straits Research predicts the global ride-hailing and taxi market is set to grow at an annualized pace of 11.3% through 2032. Uber stands ready to capture at least a good share of this growth — here and abroad — by virtue of its dominance of the North American market and its growing number of partnerships overseas. For instance, last week the company co-launched a robotaxi service with WeRide in Abu Dhabi. And in October, Uber announced it will employ Avride’s autonomous delivery robots to power its Uber Eats food-delivery service. Although small in scale now, plans for expansion are already in place including one that will eventually ferry people.
Interested investors should prepare for continued volatility. This is still a relatively young technology company, after all, generating somewhat unpredictable results. Uber Technologies is also viewed as being economically sensitive. That’s the big reason the stock’s down 24% just since October’s peak.
Take a step back and look at the bigger picture though. Uber now has enough scale to consistently cover its fixed as well as its variable costs, something that wasn’t clear it would ever be able to achieve just a few years ago. Moreover, growth from here is almost certain to be paired with even stronger profit growth.
The analyst community seems to think so, anyway. Its consensus target of $90.89 is 39% above the stock’s recent price. The vast majority of this crowd also rates Uber stock as a strong buy.
At first blush Realty Income(NYSE: O) seems like nothing more than a dividend stock (albeit a great one, boasting a forward-looking dividend yield of 5.6%). If immediate, above-average income is your investing goal though, you could certainly do worse, particularly given that the company’s raised its dividend payout every year for the past 30 years.
Even if your goal is net growth, however, there’s no need to rule this income-generating ticker out.
It’s not actually a stock, for the record. Realty Income is a REIT, which is short for real estate investment trust. These are companies that own rent-generating properties like office buildings, hotels, and apartment complexes; most of their net profits are passed along to shareholders.
Even by REIT standards, Realty Income is unique. See, it specializes in retail space and other consumer-facing businesses.
This seems risky on the surface. The brick-and-mortar retailing industry is perpetually defending itself from the ongoing growth of online shopping, after all. Coresight Research reports that as of early November nearly 6,500 storefronts in the United States had been shuttered since the end of 2023, with more than 40 retailers declaring bankruptcy during this time.
But, Realty Income mostly sidesteps this headwind by renting to the industry’s most resilient retailers. Its top tenants include Dollar Tree, Walmart, FedEx, and 7-Eleven, just to name a few. In this vein, as of the end of the third quarter 98.7% of its retail space was leased, maintaining its industry-leading occupancy rate that only fell to 97.9% even during pandemic-riddled 2020.
But net capital appreciation? Here’s the thing: Although its superior and reliable dividend makes for a great bullish argument to income-minded investors, reinvesting this dividend into more shares of the stock paying them has actually produced growth-like results for long-term owners. The key has simply been sticking with the position and reinvesting these ever-growing monthly (yes, monthly) dividends.
Finally, add Coca-Cola(NYSE: KO) to your list of stocks to buy while they’re on sale if you’ve got an extra $1,000 to put to work for at least a few years.
Coca-Cola is, of course, the world’s biggest non-alcoholic beverage player, although it’s so much more than its namesake cola. Gold Peak tea, Minute Maid juice, Powerade sports drink, and Dasani water are just some of the other brands that are part of the Coca-Cola family. This diverse portfolio of products means the company’s always got something to offer consumers no matter how their preferences may be changing.
That doesn’t mean Coca-Cola’s immune to any and all headwinds. Take last quarter, for instance. While its top and bottom lines of $11.95 billion and $0.77 per share (respectively) both topped expectations, price increases weren’t exactly well received. Total volume sold during the three-month stretch fell to the tune of 1%, dragging revenue lower by the same amount. This soft patch is the crux of the reason Coca-Cola stock is down 15% from its September high.
As you should with Uber Technologies and Realty Income, however, take a step back and look at the bigger picture. Coca-Cola’s current headwinds aren’t something the company hasn’t powered through multiple times in the past, emerging stronger every time. Although a 15% pullback may not be a massive discount, that may be all the discount you’re going to see from shares of this high-quality, time-tested beverage company with a strong track record of long-term growth.
The kicker: While dividend income might not be your priority right now, this stock’s forward-looking yield of 3.1% is better than average, and compelling even if you’re only looking for a constant flow of cash to buy new growth stocks with. It’s a quarterly dividend that’s also not only been paid like clockwork for decades, but increased in each of the past 62 years.
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James Brumley has positions in Coca-Cola. The Motley Fool has positions in and recommends FedEx, Realty Income, Uber Technologies, and Walmart. The Motley Fool has a disclosure policy.
