With the first quarter of 2021 almost over, many top firms we follow on Wall Street are making some changes to their lists of high-conviction stock picks for clients. With all the major indexes hitting all-time highs recently, it makes sense to examine these lists. The rest of the year could have additional volatility, as the political and geopolitical cycle still could prove to be very explosive components.
[in-text-ad]
With fourth-quarter earnings reporting all but over, the analysts at BofA Securities are making some big changes to the firm’s US 1 List of top stock recommendations. One new company, Gartner Inc. (NYSE: IT), was added, and two that have performed admirably have been removed. They are Bristol-Myers Squibb Co. (NYSE: BMY) and Thomson Reuters Corp. (NYSE: TRI), which still retain Buy ratings at BofA Securities.

While covering the newest addition, we also screened the list for companies that pay solid dividends and could benefit from the big rotation we are seeing across Wall Street. We found three additional ideas that make sense for growth investors now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Gartner

This is the newest member of the US 1 list, and it is a very strong idea for investors searching for stocks to buy that are not overcrowded with momentum players. Gartner is a leading global research and advisory firm, helping senior executives in information technology, finance, human resources and other areas make better business decisions.

The company’s Research segment provides subscription research products and associated tools and analytics, and its smaller Events and Consulting segments are extensions of the research offerings that extend the value to clients. Research, Events and Consulting are 81%, 10% and 9% of sales.

BofA Securities has five specific reasons the firm is bullish on the shares now:

1. The team expects a strong cyclical resurgence in 2021.
2. The company’s commitment to margin expansion is a big positive.
3. Rising stock buybacks combined with revenue acceleration and margins should equal 15% earnings-per-share and free-cash-flow growth.
4. The analyst feels that if Gartner delivers on these metrics, the company’s valuation can expand to the peer average, which is higher.
5. The team also feels that positive estimate revisions are likely in 2021.

The BofA Securities price target for the shares is $220, and the Wall Street consensus target is $215. Gartner stock closed Wednesday’s trading at $184.03 per share.

Citigroup

Shares of this top bank have rallied well off the lows and look poised to move higher in the rest of 2021. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, governments a broad range of financial products and services.

Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. It operates and does business in more than 160 countries and jurisdictions.

Trading at a still very cheap 9.9 times estimated 2021 earnings, Citigroup stock looks very reasonable in what remains a volatile stock market and in a sector that has lagged dramatically until recently.

Investors in Citigroup stock receive a 2.77% dividend. BofA Securities has a $100 price target, while the posted consensus target is lower at $65.72. The shares popped almost 4% on Wednesday to close at $73.75.
[in-text-ad]

Crown Castle

Shares of this top cell tower company offer incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) is one of the largest U.S. wireless tower companies, with over 40,000 towers and approximately 80,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. The core business for the company is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.

Crown Castle is one of the best stocks in the group for more conservative investors as the high-yield distribution and low volatility make it a good holding for accounts seeking growth and income with less risk.

Investors receive a 3.50% distribution. The $180 BofA Securities price is above the $171.43 consensus target. Crown Castle International stock closed at $151.94 on Wednesday.

Eaton

While less known than some of the other US 1 list members, this is a solid buy for growth and income investors. Eaton Corp. (NYSE: ETN) operates as a power management company worldwide. Its Electrical Products segment offers electrical and industrial components, wiring devices and structural support systems, as well as residential, single-phase power quality, emergency lighting and fire detection, and circuit protection and lighting products.

The company’s Electrical Systems and Services segment provides power distribution and assemblies, three-phase power quality products, hazardous duty electrical equipment, explosion-proof instrumentation, utility power distribution equipment, power reliability equipment and services.

Eaton’s Hydraulics segment offers power, controls and sensing and fluid conveyance products, as well as filtration systems solutions, industrial drum and disc brakes and golf grips. The company’s Aerospace segment provides hydraulic power generation and fuel systems, controls and sensing, and fluid and conveyance products for commercial and military use.

Investors receive a 2.18% dividend. BofA Securities has set a giant $155 price target. The $123.26 consensus target for Eaton stock is less than Wednesday’s $139.25 per share close.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Given recent huge market moves and volatility, it may be wise to buy partial positions and see if we don’t indeed get the 5% to 10% correction that many expect. That noted, all these stocks are great additions to long-term growth portfolios and are the top ideas the BofA Securities analysts recommend for their customers.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.