4 Stocks Ready to Soar

THE MONEY IDEA💡
4 Stocks Ready to Soar

Today, we're highlighting four stocks with strong catalysts for future growth that are well-positioned to deliver substantial returns. These stocks stand out for their strategic initiatives and potential to capitalize on emerging market trends. We’ll dive into these promising picks by Morningstar and see why you should consider adding them to your portfolio.

Let’s go.

THE MONEY IDEA💡
4 Stocks Ready to Soar

United Parcel Service, Inc. (NYSE: UPS)

• Valuation: UPS is a 4-star rated stock trading at a 14% discount with a dividend yield of 4.8%.

• Revenue and Earnings Rebound: Both revenue and earnings are expected to bottom out and start rebounding in the second half of this year.

• Efficiency Measures: The company is mitigating recent wage hikes through efficiency improvements and cost management.

• Union Contract: Recent renegotiation of the union contract provides more clarity on future costs and operations.

• Long-Term Growth: As revenue and earnings start to grow again, the market is likely to revalue the stock higher, recognizing its fundamental strength.

Nutrien Ltd. (NYSE: NTR)

• Valuation: Nutrien is a 4-star rated stock trading at nearly a 30% discount to fair value with a dividend yield of 4.3%.

• Low-Cost Provider: The company maintains its low-cost position in potash and nitrogen, crucial for its narrow economic moat.

• Demand Forecast: Management forecasts potash demand to be between 80-85 million metric tons by 2030, aligning with Morningstar’s forecast of 82 million metric tons.

• Market Dynamics: Demand for potash is expected to grow faster than supply, driving prices up and boosting profit growth starting in 2025.

• Capital Allocation: Nutrien's disciplined capital allocation strategy focuses on maintaining low costs rather than pursuing major capital-intensive projects.

Huntington Ingalls Industries, Inc. (NYSE: HII)

• Valuation: Huntington Ingalls is a 5-star rated stock trading at a 23% discount with a 2.1% dividend yield.

• Wide Economic Moat: The company is the largest independent military shipbuilder in the U.S., providing nuclear aircraft carriers and submarines.

• Revenue Visibility: Being a government contractor, Huntington has a predictable revenue stream, despite quarterly lumpiness.

• Defense Budget Growth: Increasing military budgets are expected to drive revenue growth, with a focus on products like submarines and uncrewed sea vessels.

• Earnings Growth: Earnings are expected to bottom out in the short term and start growing again in 2025, supported by geopolitical tensions and defense spending.

Kilroy Realty Corporation (NYSE: KRC)

• Valuation: Kilroy is a 5-star rated REIT trading at half of Morningstar’s fair value estimate with a high dividend yield of 6.9%.

• Geographic Focus: Kilroy owns office space in tech-heavy areas like Los Angeles, San Diego, San Francisco, Austin, and Seattle.

• Tech Sector Exposure: Increasing occupancy and foot traffic in its tech-focused office spaces are positive signs amidst general office space concerns.

• Modern Portfolio: The average age of Kilroy's buildings is 11 years, significantly newer than many peers, attracting better occupancy rates.

• Life Sciences: 25% of Kilroy’s portfolio is in life sciences, providing a more defensive revenue stream compared to general office space.

The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

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