Tariff tensions put the stock market under pressure, but as the old saying goes, volatility brings opportunity. It’s not every day that investors get to pounce on must-buy stocks at depressed prices, so you definitely don’t want to miss out on this unusually favorable risk-to-reward scenario.
At the same time, there’s no need to buy everything under the sun. Sticking to well-known names with large market capitalizations can add a layer of safety when you go bargain shopping.
With that in mind, let’s delve into three easy, high-profile stock picks that you can buy right now to build wealth for the long term.
Bank of America
Ready to try a Warren Buffett holding that you can (literally) bank on? Financial stocks might not be in favor at the moment, but Bank of America (NYSE:BAC | BAC Price Prediction) offers two things that should appeal to Buffett and any opportunistic investor: decent dividends and a good value.
On Jan. 29, Bank of America’s board declared a quarterly cash dividend distribution of $0.26 per share. BAC stock closed at $41.44 on March 17, and if we annualize the dividend to $1.04 per share, then Bank of America’s forward annual dividend yield will be $1.04/$41.44 or 2.5% — a nice bonus for income-focused investors.
Of course, you shouldn’t just chase yield during these tumultuous times. Currently trading at around 13 times its trailing earnings, Bank of America is a recent sales grower with revenue (net of interest expense) of $25.3 billion, up 15% year over year (YOY). A primary driver of this revenue growth, no doubt, is the company’s 22% increase in consumer investment assets to $518 billion.
These are reassuring stats amid a volatile market backdrop. Better yet, Bank of America more than doubled its Q4 2024 to $6.7 billion, or $0.82 per diluted share, from just $3.1 billion, or $0.35 per diluted share, in the year-earlier quarter. Hence, it looks like Bank of America is a rock-solid, Buffett-backed bank that’s unafraid to reward its loyal shareholders in 2025.
General Motors
Next up is General Motors (NYSE:GM) stock, which should be an easy wealth builder as long as gasoline prices remain fairly low. Barring unexpected events, the current presidential administration’s philosophy of “drill, baby, drill” ought to promote a favorable market environment for internal combustion engine (ICE) vehicle producers like General Motors.
General Motors’ board approved a 25% quarterly dividend increase (from $0.12 to $0.15 per share per quarter) not long ago, and the automaker’s 0.98% forward annual dividend yield is respectable if not necessarily life-changing. There’s more than one way to return capital to the shareholders, though.
In particular, General Motors has approved an “accelerated share repurchase (ASR) program” that includes a $2 billion share buyback authorization. This aggressive share-repurchase activity could, at least in theory, put a floor on the GM stock price for a while.
Meanwhile, General Motors’ trailing 12-month price-to-earnings (P/E) ratio of 7.7x suggests that the shares are a good value. After all, the sector median P/E ratio is 18.23x.
And if General Motors’ fourth-quarter 2024 net loss attributable to shareholders of $3 billion bothers you, it shouldn’t. Bear in mind that this figure includes $5 billion worth of “special charges” that aren’t likely to be repeated. Thus, when all is said and done, General Motors should be considered a profitable business with wealth-sharing propensities.
Alphabet
How often do Magnificent Seven members have P/E ratios below 20x? Not very often, so Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stock is now a value pick as the company’s trailing P/E ratio stands at 19.96x.
Furthermore, GOOG/GOOGL stock belongs in the must-buy wealth-builders category because investors ought to have at least some exposure to artificial intelligence (AI) technology and cybersecurity in the 2020s. Alphabet is heavily invested in AI, and the firm just announced an agreement to acquire cybersecurity firm Wiz Inc.
Granted, Alphabet’s annual dividend yield of around half a percent probably won’t make you fabulously wealthy overnight. That said, at least you’ll have the reassurance of owning a piece of a search engine behemoth that’s still growing.
To put some figures to this contention, Alphabet grew its revenue 12% YOY to $96.5 billion and its earnings per share (EPS) 31% to $2.15 in last year’s fourth quarter. Particularly impressive was Alphabet’s growth in Google Cloud revenue, which surged 30% to $12 billion.
CEO Sundar Pichai mentioned AI repeatedly in Alphabet’s quarterly press release — but then, that’s to be expected nowadays. All in all, investors should consider adding an easy, compelling value-and-growth mix to their portfolios today with GOOG/GOOGL stock.
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