Investing
5 All-American 4th 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 among the favorites among all citizens, it has to be Independence Day. It transcends all walks of life, and the secular nature of the celebration makes it one for all residents, honoring a day that is perhaps the most important in the nation’s history. From the largest cities to the smallest rural communities, the pride and participation of small kids to senior citizens mark 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 Sunday, so many may be up for an extended long weekend as the national holiday is set for Monday, July 5. 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 to travel for fun vacations.
We screened the BofA Securities research database and found five top companies that may have a solid start to the third quarter because of the holiday. All their stocks are rated Buy. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Alaska Air
This company has big west coast exposure and continues to rank high on Wall Street as consumers return to the sky for business and holiday travel. Alaska Air Group Inc. (NYSE: ALK) is the parent company of Alaska Airlines, which serves more than 100 cities through an expansive network in Alaska, the Lower 48, Hawaii, Canada and Mexico. Despite recent challenges by other carriers for superiority in the Northwest, the company has strong customer loyalty, which has contributed to outstanding earnings and revenue growth.
Alaska Air focuses on point-to-point traffic in the Pacific Northwest. However, about 20% of its traffic connects over its hubs in Anchorage, Seattle, and to a lesser extent Portland. By developing transcontinental markets, and more recently Hawaii, the company has transformed from a largely north-south directional carrier to one with a more balanced network.
The BofA Securities price target for the shares is $80. The slightly higher Wall Street consensus target price is $81.71. The final trade for Alaska Air Group stock on Thursday was reported at $61.43 a share.
Coca-Cola
This remains a top Warren Buffet holding and offers not only safety but also 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 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. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Coca-Cola stock investors receive a 3.10% dividend. BofA Securities has a $60 price target, a bit higher than the $59.62 consensus target. The shares closed on Thursday at $53.96 apiece.
Disney
This top consumer media company not only has multiple streams of income to push revenue and is a huge reopening winner, but its shares are on the firm’s US 1 list of top picks. Walt Disney Co. (NYSE: DIS) is the largest publicly traded media and entertainment company and global leader in producing high-quality, branded family entertainment.
Key assets include its theme parks (six locations globally), the ABC TV network, ESPN, FX, National Geographic and other cable networks, iconic film studios (Disney, LucasFilms, Marvel, Pixar, 20th Century Fox), Star India, direct-to-consumer streaming platforms (Disney+, 66% Hulu stake and ESPN+) and consumer products.
This is a giant reopening play for the theme parks, and the company’s Disney+ streaming product has been a massive success. On April 30, after just over 13 months of closure, Disneyland celebrated its second proper grand opening since July of 1955, having closed only rarely and sporadically, and never having been closed for any extended period since the opening in 1955.
The $223 BofA Securities price target is well above the $207.51 consensus target. Walt Disney stock ended Thursday trading at $177.26 a share.
Exxon
This mega-cap energy leader has been on fire, and with people hitting the road for the holiday weekend, there could be some big gasoline consumption. 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.
BofA Securities said this about the company after it posted strong earnings for the first quarter:
Earnings beat versus our estimate was entirely on chemicals with margins at a 10 year high. Solid quarter with debt down $4 billion quarter-over-quarter, cost initiatives on track and with the announced sale of UK non-core assets. Retain Buy as ExxonMobil has invested through the cycle which positions it to expand its future free cash flow to support dividends and stock buybacks.
The company’s huge 5.52% dividend will continue to be defended. BofA Securities has set a huge $90 price target. The consensus target is $65.77, and Exxon Mobil stock closed on Thursday at $63.26 per share.
Kraft Heinz
Hot dogs and cheeseburgers will be on the grill for sure this weekend, and this company stands to benefit. Kraft-Heinz Co. (NASDAQ: KHC) was formed six years ago via the merger of H.J. Heinz and Kraft Foods. The company is a leading global food company, with $29 billion of annual revenues generated by such well-known brands. It is the third-largest food and beverage manufacturer in North America, deriving 76% of revenues from that market and 24% internationally.
The company’s brands include not only Kraft and Heinz but also Oscar Meyer, Maxwell House, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones and Velveeta.
Shareholders receive a 3.92% dividend. The BofA Securities price target is $46. The $42.36 consensus target is closer to Thursday’s closing price of $40.49 a share.
These five All-American companies should have solid holiday sales and are poised to be solid investments for the second half of 2021. 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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