Investing

5 All-American Fourth of July Stocks to Buy for Year-Round Gains

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If there is any holiday celebrated in the United States that is a favorite of all citizens, it has to be the Fourth of July. It transcends through all walks of life, and the secular nature of the celebration makes it one for all who live here, as we honor a day that is perhaps the most important in our history. From the largest cities to the smallest rural communities, the pride and participation of small kids to senior citizens marks this truly special day.

At 24/7 Wall St. we thought it was a good time to look at top companies that are usually big winners and may be even bigger this year as the celebration falls on a Thursday, so many may be up for an extended long weekend. With parades, barbecues, boating, bands and much more, many Americans will be going to the store to get provisions for the big day, or heading out for fun vacations.

We screened the Merrill Lynch research database and found five top stocks that may have a solid start to the third quarter because of the Independence Day holiday. All are rated Buy.

Coca-Cola

This top Warren Buffet holding not only offers safety but an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. With coolers getting packed for picnics, parades and vacations you can bet that they will be stuffed with products from this iconic American company. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Coca-Cola investors receive a 3.1% dividend. The Merrill price target for the stock is $55, while the Wall Street consensus price target is $52. The stock closed Tuesday at $51.98.

Disney

This is a top consumer media company with multiple streams of income to push revenue, and it is a member of the Merrill Lynch US 1 list. Walt Disney Co. (NYSE: DIS) stock continues outperforming on a near-term and long-term basis. With the movie studio business poised to improve, as with accelerating theme park business, the network programming continues to drive viewership with extensive sports programming. Combine that revenue growth with the company’s solid media networks and interactive presence, and 2019 and 2020 revenue estimates could be conservative.

The Disney Media Networks segment operates broadcast and cable television networks, domestic television stations and radio networks and stations, and it is involved in the television production and television distribution operations. Its cable networks include ESPN, Disney Channels, and ABC Family, as well as UTV/Bindass and Hungama. This segment also owns eight domestic television stations.

Families will be flocking this summer to the company’s theme parks such as Disneyland, Walt Disney World in Orlando, Magic Kingdom Park, Epcot and also the international park. The long holiday week could jumpstart and push attendance even higher.

Disney shareholders receive a 1.24% dividend. Merrill has a $168 price target, and the consensus target is $151.43. Shares closed at $142.53 on Tuesday.

Exxon

This company remains a conservative top Wall Street energy pick. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

Exxon announced estimated first-quarter earnings of $4.7 billion, or $1.09 per share assuming dilution, compared with $4.0 billion a year earlier. Cash flow from operations and asset sales was $10 billion, including proceeds associated with asset sales of $1.4 billion. Note that Exxon has one of the highest paid American CEOs.

With Americans hitting the road in record numbers for the Fourth of July holiday and perhaps the start of their vacations, you can bet that plenty of gasoline will be sold to get everybody to their destinations, and prices across the nation remain very reasonable this summer.

Exxon has raised the per-share dividend by a nickel to $0.82, which is a solid 4.54% dividend. The $100 Merrill price objective is well above the $85.08 consensus. The stock closed most recently at $76.56.

Kroger

This top grocer does almost all of its business in the United States. Kroger Co. (NYSE: KR) is the second largest U.S. food supermarket retailer and generates $120 billion in annual sales. Kroger operates roughly 2,800 supermarkets throughout 35 states and under two dozen banners. Kroger also sells fuel at 1,450 supermarket fuel centers and operates 2,268 pharmacies and 274 jewelry stores.

The stock remains very cheap, as the company has a market cap of under $19 billion. The shares were nailed back in March when the company reported weak first-quarter results. While it is slowly recovering, the sell-off is still giving investors a great entry point.

Families will be flocking to the grocery store to get all the fixings for holiday barbecues, picnics, camping trips, heading to the lake, and other Independence Day festivities.

Shareholders receive a 2.96% dividend. The Merrill has set a $28 price target. The consensus target is $28.17, and shares closed at $21.44.

Molson Coors

While the iconic American beer company did merge with a Canadian beer giant, it is still based in Denver. Molson Coors Brewing Co. (NYSE: TAP) is one of the world’s largest brewers, with core brands Coors Light, Carling, Molson Canadian and Staropramen.

Molson and Coors merged in February 2005 and added StarBev in 2012, and it serves markets including the United States, Canada, Eastern Europe and the United Kingdom and Ireland, with exposure to other markets through its Molson Coors International division. It acquired the remainder (58%) of the U.S. joint venture (MillerCoors) in mid-October 2016.

What picnic or Fourth of July gathering would be complete without a cold beer, and you can bet that sales will ramp up for the holiday and the long weekend. The Coors light brand remains a huge favorite with Generation X and baby boomers, who were all around when the light beer revolution started.

Shareholders receive a 2.91% dividend. The Merrill price target is $70. The consensus figure is $66.56, and shares ended Tuesday at $56.13.

These five all-American companies should have solid Fourth of July sales and their stocks may be poised to continue to be solid investments for the second half of 2019. With second-quarter earnings right around the corner, it may be smart to buy partial positions now and see how the results come in.

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