With the first quarter of 2021 well underway, many of the top companies we follow on Wall Street are making some changes to the lists of their high-conviction stock picks for clients. With the market recently hitting all-time highs on all the major indexes, it makes sense to examine the lists, as the rest of the year could have some additional volatility as the political and geopolitical cycle could still prove to be very explosive components.

With fourth-quarter earnings reports still pouring in this week, the analysts at BofA Securities have made some big changes to the firm’s US 1 List of top stock recommendations. Three new companies are added, and two that have performed admirably are being removed.

While the three new additions are rated Buy at BofA Securities, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

HCA Healthcare

This market leader is a good idea for more conservative investors looking for health care positioning. HCA Healthcare Inc. (NYSE: HCA) offers health care services. It provides diagnosis, treatments, consultancy, nursing, surgeries and other services, as well as medical education, physician resource center and training programs. It serves patients in the United States, operating from its network of approximately 185 hospitals and 2,000 sites of care.

With its founding in 1968, HCA Healthcare created a new model for hospital care in the United States, using combined resources to strengthen hospitals, deliver patient-focused care and improve the practice of medicine. The company has conducted a number of clinical studies, including one that demonstrated that full-term delivery is healthier than early elective delivery of babies and another that identified a clinical protocol that can reduce bloodstream infections in ICU patients by 44%.

Shareholders receive just a 0.26% dividend. BofA Securities has a $197 price target for the shares, while the Wall Street consensus target is $183.71. The closing price for HCA Healthcare stock on Monday was $166.93, after almost a 3% gain for the day.

Mastercard

This continues to be one of the top credit card plays in the world. Mastercard Inc. (NYSE: MA) is a global payments provider that operates one of the largest payment processing networks, connecting billions of consumers, millions of merchants, and thousands of financial institutions in more than 210 countries. Its brands include Mastercard, Maestro and Cirrus.

The company also provides value-enhancing offerings such as loyalty and rewards programs, information services and consulting. According to Nilson estimates, Mastercard is the third-largest global credit and debit network, as measured by volume.

Small businesses and individuals having a hard time entering the digital economy are getting a boost from Mastercard as the need to receive funds electronically and make digital and contactless payments has been underscored by the COVID-19 pandemic.

The company has pledged to connect 1 billion people and 50 million small businesses to the digital economy by 2025. This commitment is an extension of its 2015 promise to bring 500 million people who don’t have ready digital access to financial products into the system.

The analysts said this when discussing fourth-quarter results:

Fourth quarter results were better than feared and management sounded cautiously optimistic on trajectory of recovery. January metrics were largely stable relative to December levels with non-intra Europe x-border volumes showing improvement. We believe MasterCard is well positioned for a post-pandemic recovery.

Investors receive a 0.60% dividend. The BofA Securities price target is $400, and the consensus target is $382.86. The final Mastercard stock trade on Monday was posted at $321.56.

Schlumberger

This top oil services company is expected to benefit from increased global exploration and production spending, and makes its debut on the US 1 list. Schlumberger Ltd. (NYSE: SLB) is the world’s largest provider of services and equipment used in drilling, evaluation, completion, production and maintenance of oil and natural gas wells.

The company operates in the oilfield service markets through three groups: Reservoir Characterization, Drilling and Production. Reservoir Characterization Group consists of the principal technologies involved in finding and defining hydrocarbon resources. These include WesternGeco, Wireline, Testing Services and Schlumberger Information Solutions.

Rising activity, backlog additions for integrated projects and the possibility that international pricing has bottomed should improve conditions for the rest of 2021. That should be supportive of improving earnings over the next few years, and the analysts noted this:

Supported by our view the oil and gas industry is on the cusp of a multi-year cyclical recovery, we are adding Schumberger to the US 1 list. While the United States has led the recovery thus far, we expect the next leg of the cycle to favor international markets, where the company earns >80% of revs. Compared to the last cycle, the stock has derated by almost 50%, which is simply too much derating, in our opinion.

Shareholders receive a 2.25% dividend. The $31 BofA Securities target price is well above the $22.16 consensus target for Schlumberger stock. Shares closed at $22.15 on Monday.

The team removed Cigna Corp. (NYSE: CI) and Fidelity National Information Services Inc. (NYSE: FIS) from the list, but both remain Buy rated.

Given the huge market moves over the past year, it may be wise to buy partial positions and see if we don’t indeed see a test of the 200-day moving average, or at least a sizable pullback. That noted, all these stocks are great additions to long-term growth portfolios and are in sectors that many feel will outperform this year.

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