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All Contents © 2017The Kiplinger Washington Editors
By Laura Hoy
| December 2016
With the holiday season officially upon us, a month of eating, drinking and spending is sure to have its consequences. But that doesn’t mean you choice in stocks to buy for 2017 has to be detrimental.
Now is the time to buy a gym membership, get some healthy recipes on the go and get your portfolio in shape to prepare for the resolutions you are bound to make come midnight on Dec. 31 — lose weight, live a healthier life and most importantly, make more money.
While the first two may be a bit harder to come by and much easier to fail, making more money can be easily done with a well-balanced portfolio in 2017.
With that in mind, Bank of America, Nike, Check Point Software Technologies and Netflix are four of the best stocks to buy for 2017.
Here’s a look at why you should consider buying these four stocks ahead of the New Year.
This slide show is from InvestorPlace, not the Kiplinger editorial staff.
Senseiich via Wikipedia
Banking stocks have had a rough few years as tighter regulations and ultra-low interest rates have weighed on their profits. However, better days are on the horizon for the financial sector as an improved economy, imminent interest rate hikes and GOP dominance in Washington are all good signs for U.S. banks.
Bank of America Corp. (BAC) is likely to be one of the largest beneficiaries of the improved conditions in the financial sector, making it a top pick for 2017 stocks to buy.
Most agree that an interest rate increase is coming next year, and Bank of America will make around $6 billion worth of interest income on its deposits should those predictions come true. This should give BAC stock a significant boost next year.
Hazemaze676 via Wikipedia
Athletic apparel maker Nike Inc. (NKE) has had a difficult year and the firm’s share price has fallen 19% since the beginning of January. However, NKE’s dominance in the industry and solid financials make now a good time to add the firm to your portfolio.
The consumer discretionary sector will likely see a lift in the coming year as an improving economy will give people extra spending cash. Should a downturn occur, investors need only look at Nike’s performance during the recession in the early 2000’s. When many larger firms went out of business, NKE was able to stay afloat and even increased its dividend payments.
Not only is Nike one of the best stocks to buy as far as the consumer discretionary sector goes, but the stock may also become a great income investment. Currently, NKE’s dividend yield is just 1.42%, but the company has a proven track record of consistently increasing dividend payouts.
Investors can expect dividend increases to continue as well, because the firm’s payout ratio is just 30%.
This year was a big year for cybersecurity firms after several high-profile hacking attacks prompted everyone from big businesses to independent homes to get a better handle on their internet security.
While there are quite a few big name security firms to choose from, Check Point Software Technologies Ltd. (CHKP) is one of the best cybersecurity stocks to buy because the company has focused on underserved markets like mobile security and the internet of things, and the firm has proven itself to be cost-conscious and financially sound. Check Point is also much cheaper than many of its rivals with a price-to-earnings ratio of 20.7%.
CHKP pays much lower salaries and stock bonuses than most of its competitors. Check Point’s operating expenses rose to 52% percent of its total revenue in the most recent quarter, marking a quarter of big-time spending for the firm. However, compared to its peers like Palo Alto Networks Inc. (PANW), whose expenses equal a whopping 86% of its revenue, CHKP is a very conservative firm.
Not only that, but its location is in Israel, where cybersecurity has been a priority; this gives the company an edge.
Chris via Flickr
Netflix, Inc. (NFLX) went from being a must-have tech stock to losing nearly 10% of its value earlier this year after its earnings report when it was unable to add as many subscribers as it initially planned.
However, this dip in the Netflix share price is one of the reasons it’s one of the best stocks to buy, especially considering that next year is set to be a big one for the streaming service. Netflix has partnered with Walt Disney Co. (DIS), which will be a big-time benefit when it comes to content. The partnership means that NFLX will be able to make many of the nation’s biggest blockbusters available on its platform each month.
Adding Disney content to its repertoire means that Netflix has a much stronger value proposition and will likely be able to lure even more people into subscribing. Not only that, but there is chatter that the Disney deal may give the firm the ability to raise its prices. All of these factors are likely to improve shareholder sentiment in the coming year and bring NFLX stock much higher.
This article is from Laura Hoy of InvestorPlace. As of this writing, she was long Netflix.
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