6 Stocks for Every Economy

Author

Kenny
January 10, 2025

THE MONEY IDEA💡
6 Stocks for Every Economy

Welcome to Money Masters!

Economic uncertainty is nothing new for investors, and having a diversified portfolio can help weather the storm. Here's a look at six stocks picked by Morningstar experts, categorized by whether the economy slows down or continues to grow, that show promise in the year ahead. Each pick includes key benefits to help you understand their potential.

Let’s dive in.

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If the Economy Stalls

  • Stability in Revenue: Verizon's defensive nature ensures steady income as customers prioritize paying their phone bills.

  • Valuation: Trades at a 24% discount to Morningstar's fair value estimate.

  • High Dividend Yield: Offers a 6.7% dividend yield, making it attractive for income-focused investors.

  • Oligopoly Dynamics: As a key player in a competitive industry, Verizon benefits from pricing discipline.

  • Long-Term Resilience: Proven ability to maintain margins and adapt to market conditions.

  • Strong Brand Portfolio: Revitalized strategy focuses on reinvesting in iconic brands.

  • Economic Moat: Rated narrow, ensuring competitive advantages in the food industry.

  • Discounted Valuation: Trades at a 45% discount to fair value with a 5.25% dividend yield.

  • Margin Recovery Potential: Expected gradual improvement in operating margins post-pandemic.

  • Consumer Staples Dependability: Defensive category stock that holds strong appeal during economic slowdowns.

  • Defensive Growth: Operates in crop protection chemicals, vital regardless of economic conditions.

  • Undervalued Opportunity: Trades at over a 50% discount to fair value, with a 4.8% dividend yield.

  • Revenue Resurgence: Projected to bounce back strongly post-inventory destocking.

  • Innovative Products: New product lines are driving incremental growth.

  • Resilience to Economic Shifts: Weather and commodity prices, not GDP, primarily influence performance.

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.

THE MONEY IDEA💡
If the Economy Grows

  • AI Market Leader: Positioned as a strong competitor in the growing artificial intelligence and GPU markets.

  • Attractive Valuation: Trading at a 22% discount to fair value.

  • Innovation-Driven Growth: Focused on advancing technology in semiconductors for servers and PCs.

  • Long-Term Upside: Expected to capture significant market share over time.

  • High Revenue Potential: Supported by increasing demand for AI and tech infrastructure.

  • Pandemic Recovery Play: Positioned for long-term growth as consumer spending normalizes.

  • Economic Moat: Narrow moat rating with a focus on food packaging and shipping materials.

  • Discounted Valuation: Trades at a 38% discount to fair value.

  • Margin Expansion: Projected improvement in operating margins to 16% over the next five years.

  • Resilient Demand: Packaging remains essential as e-commerce and food industries grow.

  • Efficient Operations: Low-cost provider with assets on the lower end of the shale cost curve.

  • Dynamic Dividend Policy: Combines fixed and variable dividends, with an estimated 4.25% yield.

  • Valuation Safety: Trades at a 29% discount to fair value, offering a strong margin of safety.

  • Energy Sector Stability: Shale oil remains critical in a growing global economy.

  • Free Cash Flow Returns: Focused on returning 70% of free cash flow to shareholders.

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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