There is never a bad time to buy a good stock. If you can get into a good stock at a discount, then that’s better. Finally, you will ensure a greater net return on your invested money.
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 bit unique from the other two. So, it wouldn’t be wrong to jump into all three at these low prices.
1. Uber Technologies
Just over a decade ago the idea of hiring individuals who drive their own cars to create a fleet of taxis seemed outrageous. Now ride-hailing is not only common place, but an industry pioneer Uber Technologies (UBER -2.41%) it is more and more profitable, and more and more.
More of the same is also on the way. This year’s expected top-line growth of 17% should be followed by 16% growth next year, with earnings per share expected to improve at an even faster clip.
This is just the beginning, though. Straits Research predicts that the global ride-hailing and taxi market will grow at an annualized rate of 11.3% until 2032. Uber is poised to capture at least a good portion of this growth – here and abroad – by virtue of its dominance of the North American market and its growing number of overseas partners. For example, last week the company co-launched a robotaxi service with WeRide in Abu Dhabi. And in October, Uber announced that it will employ Avride’s autonomous delivery robots to power its Uber Eats food delivery service. Although it is small in scale now, expansion plans are already in place, including one that will eventually deliver people.
Interested investors should prepare for continued volatility. This is still a relatively young technology company, after all, which generates somewhat unpredictable results. Uber Technologies is also seen as economically sensitive. That’s a big reason the stock is down 24% since its October peak alone.
Take a step back and look at the bigger picture though. Uber now has enough scale to consistently cover its fixed and variable costs, something it wasn’t clear it could ever achieve just a few years ago. Furthermore, growth from here is almost certain to be associated with even stronger profit growth.
The analyst community seems to think so, however. Its consensus target of $90.89 is 39% above the stock’s recent price. Much of this crowd also rates Uber stock as a strong buy.
2. Realty Income
At first blush Income Realty (O 0.36%) It looks like nothing more than a dividend stock (albeit a great one, boasting a future dividend yield of 5.6%). If immediate, above-average income is your investment goal, however, you could certainly do worse, especially given that the company has raised its dividend payment every year for the past 30 years.
Even if your goal is net growth, however, there is no need to exclude this income generating ticker.
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 such as office buildings, hotels, and apartment complexes; most of their net profits are passed on to shareholders.
Even by REIT standards, Income Realty is unique. See, it specializes in the retail space and other consumer businesses.
This seems risky on the surface. After all, the brick-and-mortar retail industry is perpetually fending off the ongoing growth of online shopping. Coresight Research reports that as of early November nearly 6,500 storefronts in the United States were closed by the end of 2023, with more than 40 retailers declaring bankruptcy during that time.
But, Realty Income mostly abandons this headwind by renting to the industry’s most resilient retailers. Its main tenants include Dollar Tree, Walmart, FedExand 7-Eleven, just to name a few. In this regard, at the end of the third quarter 98.7% of its retail space was leased, maintaining its industry-leading occupancy rate which fell to only 97.9% even during the 2020 pandemic.
But net capital appreciation? Here’s the thing: Although its superior and reliable dividend makes a great bullish argument for income investors, reinvesting this dividend in more shares of the stocks that pay them has actually produced growth results for long-term owners . The key is to simply hang in there and reinvest these ever-increasing monthly (yes, monthly) dividends.
Or data from YCharts
3. Coca-Cola
Finally, add Coca-Cola (KO -1.13%) to your list of stocks to buy while they are on sale if you have 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 is much more than its namesake cola. Gold Peak tea, Minute Maid sugar, Powerade sports drink and Dasani water are just some of the other brands that are part of the Coca-Cola family. This diverse product portfolio means that the company always has something to offer consumers, regardless of how much their preferences change.
This does not mean that Coca-Cola is immune to all headwinds. Take the last quarter, for example. While its top and bottom lines of $11.95 billion and $0.77 per share (respectively) exceeded expectations, the price increases weren’t exactly well received. Total volume sold during the three-month stretch fell to the tune of 1%, dragging down revenue by the same amount. This soft patch is the reason why Coca-Cola stock is down 15% from its September high.
As you must with Uber Technologies and Realty Income, however, take a step back and look at the bigger picture. Coca-Cola’s current winds aren’t something the company hasn’t fueled many times in the past, emerging stronger each time. Although a 15% pullback may not be a massive discount, this may be all the discount you’ll see from the stock of this time-tested high-quality beverage company with a strong history of long term growth.
The kicker: While dividend income may not be your priority right now, the stock’s 3.1% yield is better than average, and compelling even if you’re just looking for a steady flow of cash to buy new growth stock. It’s a quarterly dividend that has not only been paid like clockwork for decades, but increased in each of the last 62 years.