Top Value Stocks That Would Make the “Magnificent Seven” List

Top Value Stocks That Would Make the “Magnificent Seven” List

The “Magnificent Seven” are a group of high market capitalization technology companies that play a major role in the economy and have generated incredible gains for investors.

But investing isn’t just about growth or tech stocks. The most successful investors typically own a diversified portfolio including technology stocks, growth stocks, value stocks, and dividend stocks, with additional diversification through other classes and categories.

Value Stocks offer much to the discerning investor. Investing legend Warren Buffett sticks almost entirely to value stocks, and he is one of the few investors who has outperformed the market for many decades. He also recommends that most retail investors buy index funds that track the market. S&P500because it is not easy to beat the market in the long term.

If you’re looking to add value stocks to your portfolio, consider Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B), Visa (NYSE:V), Walmart (NYSE:WMT), JPMorgan Chase (NYSE:JPM), MasterCard (NYSE:MA), Home deposit (NYSE:HD)And Costco wholesale (NASDAQ: COST). These seven companies have some of the largest market capitalizations in the world and have created enormous wealth for their shareholders over the years. But better yet, there is much more to come.

1. Berkshire Hathaway

Berkshire Hathaway has the seventh highest market capitalization of any U.S. company, second only to all stocks in the Magnificent Seven except You’re here. But he has higher income than any of them except Amazonand more net income than any of them except Apple. This is Buffett’s conglomerate, which wholly owns dozens of companies in addition to his enormous stock portfolio. Buffett often talks about the idea that the best companies have a long-term role to play in the American economy. Owning Berkshire Hathaway gives investors exposure to many interesting stocks, including Amazon and Apple, and allows them to benefit from Buffett’s wisdom and stock picking.

2. Visas

Visa comes in 11th on the market capitalization list. It operates the world’s largest credit card processing network, with the largest number of credit cards and the highest total payment volume. It grows as the economy grows, charging fees every time a buyer swipes one of its cards. It boasts incredible profit margins that exceed 50% and has launched many new features to stay on top of fintech trends and strengthen its moats. This Buffett stock also pays a dividend, and while it doesn’t offer a high yield (just 0.7% at the current stock price), management has increased its payout by 420% over the last 10 years.

3. JPMorgan Chase

JPMorgan Chase is the largest U.S. bank by assets, with nearly $3.4 trillion. Its fortress balance sheet has largely shielded it from the economic volatility that has sunk a few regional banks over the past year, and it has crushed earnings estimates in 2023. Those are the kinds of traits that make it a great title to hold for the future. long term. It also pays a dividend that yields 2.4% at the current share price.

4. Walmart

Walmart is America’s largest company by revenue, and even though its competitor Amazon is growing faster, the latter still has a way to go to catch up. Walmart continues to generate higher sales, comparable sales and profits, and continues to open new stores around the world. The company is also looking to make its current assets work better, such as by increasing the size of its stores, and it is finding new ways to expand, such as modernizing its advertising business to better compete with Amazon. Walmart’s dividend yields 1.4% at the current stock price.

5. Master Card

Mastercard is second only to Visa as the high-margin credit card network that powers the global economy. It’s not as big as Visa, but its revenue and net profit are growing faster, as is its stock price. It has the same sustainable model and business, and it’s also a Buffett stock. Its dividend yields just 0.6% at the current stock price, but its management team has increased it even faster than Visa’s – by 500% over the past 10 years.

6. Home deposit

Home Depot is the world’s largest home improvement chain, with more than 2,300 stores in North America. It has been pressured by inflation, but remains reliable for long-term growth and profit generation. It adopted the omnichannel model before it became popular and was well prepared for the pandemic. It is also well placed to return to growth in a more favorable economic context. Home Depot’s dividend yields 2.4% at the current stock price.

7. Costco

Costco operates a discount retail chain with a membership model that creates loyalty and high sales. It recently reported increased revenue from membership dues and record renewal rates, with shoppers even more likely to favor its lowest prices when pinching pennies. Sales growth is starting to accelerate again, and Costco has a long runway for growth as it continues to open new stores. Costco’s regular dividend yields just 0.6%, but the company also pays special dividends irregularly, and the most recent, distributed in January, was $15 per share.

Value stocks deliver steady, low-risk growth

Let’s see how these stocks compare to their tech peers so far this year.

Top Value Stocks That Would Make the “Magnificent Seven” List

As a group, the Magnificent Seven have outperformed this cohort of value stocks so far this year, as the chart below suggests. But the former have also been more volatile.

All value stocks are in positive territory this year, unlike tech stocks, and they are also almost all outperforming the S&P 500, which is up 10.1% year to date.

AMZN ChartAMZN Chart

Value stocks create shareholder value with much lower risk. Even if you don’t choose to invest in all of them, each could offer benefits for a diversified portfolio, and most of them come with the added benefit of income from dividends.

Should you invest $1,000 in Berkshire Hathaway right now?

Before buying Berkshire Hathaway stock, consider this:

THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now…and Berkshire Hathaway wasn’t one of them. The 10 selected stocks could produce monster returns in the years to come.

Equity Advisor provides investors with an easy-to-follow plan for success, including portfolio building advice, regular analyst updates, and two new stock picks each month. THE Equity Advisor The service has more than tripled the performance of the S&P 500 since 2002*.

See the 10 values

*Stock Advisor returns March 25, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Costco Wholesale, Home Depot, JPMorgan Chase, Mastercard, Meta Platforms, Microsoft, Nvidia, Tesla, Visa and Walmart. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

If there were “magnificent seven” value stocks, these stocks would make the difference was originally published by The Motley Fool

Source Reference

Latest stories