It happened in 2008 and 2009, and despite a huge rally off the bottom, many of the top companies that investors are very familiar with again have taken a beating. Needless to say, those that have been beaten down the most are in sectors that are struggling the most with the temporary new normal of shelter-in-place. While the U.S. economy is slowly opening up, getting to where it was prior to the coronavirus pandemic could take a very long time.
We screened our 24/7 Wall St. research database looking for well-known blue-chip companies that are likely to survive the current troubles and could very well offer patient investors some huge returns over the next year or so. Investors that did that in 2008 and 2009 absolutely killed it over the next few years.
These five top companies made the cut, and they all are rated Buy now by top Wall Street firms.
American Airlines
This company has its major hub in Dallas, where business should continue to boom as we open back up from the lockdown. American Airlines Group Inc. (NASDAQ: AAL) is the holding company for American Airlines.
Together with wholly owned and third-party regional carriers operating as American Eagle and US Airways Express, the airlines operate an average of nearly 6,700 flights per day to 350 destinations in over 50 countries from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C.
Note that Warren Buffet is no longer a fan, as Berkshire Hathaway recently dumped its shares in airline stocks.
Investors receive a 1.32% dividend. Deutsche Bank has a price target of $18, while the Wall Street consensus target is higher at $37.35. American Airlines stock closed at $9.25 a share on Wednesday.
General Electric
If any stock has taken a beating over the past three years, it has been this legendary corporation. General Electric Co. (NYSE: GE) businesses are organized broadly under seven segments: Power, Renewable Energy, Energy Connections, Oil & Gas, Aviation, Healthcare, Transportation and GE Capital. The company’s products and services include power generation equipment, aircraft engines, locomotives, medical equipment, compressors and others. Over half of the business is tied to service and aftermarket support.
In 2018, the venerable American industrial giant got the ultimate humiliation of being removed from the Dow Jones industrial average after a stay of over 100 years. General Electric is still one of the most valuable brands in the world.
The massive restructuring and debt reduction plans that have been announced come after years of acquisitions and changes in the core business at GE, and in some cases what many on Wall Street thought were ill-advised moves by the former CEO Jeff Immelt. The company’s once dependable dividend has been chopped to $0.04 a share and may be eliminated altogether at some point.
Investors receive just a 0.67% dividend. The BofA Securities $11 price target compares to the consensus target of $11.61. General Electric stock ended Wednesday’s trading at $5.98.
Mattel
Shares of this top toymaker have been crushed, but contrarians know that toys and games are never out of favor. Mattel Inc. (NASDAQ: MAT) designs, manufactures and markets a range of toy products worldwide. The company operates in three segments: North America, International and American Girl.
Mattel offers dolls and accessories, vehicles and playsets, and games and puzzles under the Mattel Girls & Boys brands, including Barbie, Monster High, Disney Classics, Ever After High, Little Mommy, Polly Pocket, Hot Wheels, Matchbox, CARS, Disney Planes, BOOMco, Radica, Toy Story, Max Steel, WWE Wrestling and DC Comics.
The company also provides its products under the Fisher-Price brands, such as Fisher-Price, Little People, BabyGear, Laugh & Learn, Imaginext, Thomas & Friends, Dora the Explorer, Mickey Mouse Clubhouse, Disney Jake, the Never Land Pirates and Power Wheels.
Its American Girl brands products include Truly Me, BeForever and Bitty Baby, as well as construction and arts and crafts brands, such as MEGA BLOKS, RoseArt and Board Dudes. It also publishes the American Girl magazine.
The company posted disappointing results Tuesday after the close, but JPMorgan kept an Overweight rating and an $11 price target. The consensus target is $9.00, and Mattel stock was last seen at $8.49.
Nokia
This telecommunications company once ruled the cell phone arena, until the advent of the smartphone in 2007. Nokia Corp. (NYSE: NOK) owns two main businesses: 1) Nokia Networks, a network infrastructure equipment supplier to global wireless and wireline operators, and 2) Technologies, its patent/IPR licensing activities.
Last year, Nokia, NTT Docomo and Omron agreed to conduct joint field trials using 5G at their plants and other production sites. As part of the trial, Nokia will provide the enabling 5G technology and Omron the factory automation equipment, while NTT Docomo will run the 5G trial.
The trial follows the increasing demand for wireless communications at manufacturing sites driven by the need for stable connectivity between Internet of Things devices. As background noise from machines and the movement of people have the potential to interfere with wireless communications, the trial will aim to verify the reliability and stability of 5G technology deployed by conducting radio wave measurements and transmission experiments.
The $6 Raymond James price target compares with the $6.62 consensus figure. Nokia stock closed most recently at $3.46 a share.
Sirius XM
This stock has been on a roll this year and looks poised to go higher. Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world’s largest radio company measured by revenue, and it has approximately 33.1 million subscribers. The company creates and offers commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment; and a wide-range of Latin music, sports and talk programming. SiriusXM is available in vehicles from every major car company and on smartphones and other connected devices as well as online.
SiriusXM is also a leading provider of connected vehicles services, giving customers access to a suite of safety, security and convenience services, including automatic crash notification, stolen vehicle recovery assistance, enhanced roadside assistance and turn-by-turn navigation.
BofA Securities has a $7 price target that may be going higher soon. The posted consensus target price is $7.02, and Sirius XM stock closed at $5.66 on Wednesday.
These five companies are household names to most investors and have been sent to the single-digit midget penalty box. Some of these companies may have a difficult road back to prosperity, but given what we have seen in the past, and the massive liquidity being provided in Washington, D.C., going forward, the odds are good that each survives this downturn.
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