Though the market has been on a tear recently, sentiment noticeably dipped last week, thus necessitating a closer look at stocks to buy this week. In earlier sessions, a combination of some encouraging data from corporate earnings reports and speculation that the Federal Reserve may ease up on its hawkish monetary policy boosted investor enthusiasm.
Nevertheless, the reality is that the central bank faces tough challenges ahead. For instance, despite the wave of aggressive rate hikes, the M2 money stock remains elevated compared to pre-pandemic norms. And while the employment level improved back to normal, the erosion of the personal saving rate suggests that any more troubles could substantially hurt the broader economy.
Therefore, it’s probably best to maintain a conservative posture for stocks to buy this week. Below are seven market ideas to consider.
NextEra Energy (NEE)
As a specialist in renewable energy infrastructure, NextEra Energy (NYSE:NEE) has long commanded a relevant business profile. However, geopolitical dynamics facilitate the case for NEE as one of the stocks to buy this week.
Earlier, circumstances suggested that President Joe Biden sought a diplomatic solution to the Ukraine crisis. But more recently, reports came out that indicated Biden is asking Congress to approve more than $37 billion in emergency aid to the embattled nation. It’s not so much the details of this aid package that are important for NEE stock. Rather, it’s that the crisis will likely continue.
Moreover, Russia might not integrate itself into the global community for many years. Effectively, then, a great deal of hydrocarbon energy supplies will remain inaccessible for western powers. Therefore, more emphasis will center on renewable infrastructure, which suits NextEra Energy just fine.
Granted, this is a long-term narrative. Still, it may be one of the more enduring ones, justifying NEE’s inclusion among stocks to buy this week.
Ranking among the most iconic American brands, Coca-Cola (NYSE:KO) represents a beverage-making powerhouse. Few brands capture the essence of Western capitalism quite like Coca-Cola. As well, its status as a consumer staples giant provides justification as one of the stocks to buy this week.
If you peruse the topic on the internet, you’ll come across several major publications warning about recession risks. While I’m not going to guarantee an economic downturn, I’ll say this much: It’s probably best to prepare for the worst and hope for the best. Historically, analysts targeted KO stock as a recession-resistant market idea. Moving forward, this resilient narrative should hold true.
Frankly, KO makes for one of the stocks to buy this week on the vice angle. As medical resources demonstrate, soda presents an addictive profile because it stimulates dopamine releases in the brain. This causes sensations of pleasure. Should a recession materialize, people will invariably seek some form of escapism.
As a vice, soda represents one of the least bad options.
If you’re seeking an environmental, social and governance (ESG) play, fossil fuel specialist Chevron (NYSE:CVX) won’t come first to mind. However, if you’re seeking a relevant idea for stocks to buy this week, CVX presents an attractive framework.
As stated earlier, geopolitics certainly play a significant role for Chevron. Cynically, global hydrocarbon energy supplies fell victim to Russia’s supply cuts, at least as far as Western countries are concerned. Therefore, Chevron will probably see robust profitability (i.e. low supply, high demand).
However, I also believe that CVX and its ilk will benefit from increased mobility. Some reports indicate that nine out of 10 companies plan to implement return-to-office policies in 2023. Further, recessionary pressures – I repeat, I did not say recession but recessionary pressures – put employers in the driver’s seat.
Therefore, CVX may be a surprisingly intriguing name among stocks to buy this week.
Kimberly-Clark Corp (KMB)
A multinational personal care corporation, Kimberly-Clark Corp (NYSE:KMB) offers a relatively easy idea for stocks to buy this week. When the major indices struggle, KMB’s relevance comes to light. In addition, traders may be recognizing that boring is good under the current circumstances. In the trailing month, shares gained a surprisingly hearty 15%.
Fundamentally, the case for KMB centers on everyday necessities. Manufacturing common household goods such as baby care products and toilet paper, consumers really can’t avoid these product categories. Further, KMB will likely not be victimized (as much) from the trade-down effect. In other words, because the underlying company offers essential goods, demand should stay largely consistent and predictable.
As well, the company offers healthy passive income. Per Dividend.com, KMB offers a forward yield of 3.53%. That’s much higher than the consumer staples sector average of 1.89%. Though the payout ratio is high at over 73%, Kimberly-Clark features 50 years of consecutive dividend increases. There’s no way management lets that status go without a fight.
Perhaps best known for its quirky commercials, Aflac (NYSE:AFL) represents an insurance firm. Specifically, it’s the largest provider of supplemental insurance in the U.S. To be fair, it’s an incredibly boring idea as an investment prospect. However, as I stated earlier, boring is good. Since the start of this year, AFL gained nearly 22%, beating out several formerly exciting opportunities.
So, just why the robust momentum in Aflac? In my opinion, Covid-19 proved that anything can happen. Therefore, it’s best to own comprehensive insurance coverage, just in case. This is actually a narrative that government agencies mentioned. With Aflac offering protection for coverage gaps in traditional insurance programs, AFL might see increased demand.
Indeed, the rise of AFL stock confirms it’s one of the stocks to buy this week. As well, Aflac delivers stability for investors. While not particularly generous, AFL features a forward yield of 2.37% with a payout ratio of 30.83%.
Headquartered in Chicago, Illinois, Archer-Daniels-Midland (NYSE:ADM) represents a food processing and commodities trading corporation. As such, the company effectively stands as a permanently relevant business. In this case, it’s not just my opinion. Just look at the dramatic rise of ADM in the charts, with shares gaining over 40% since its January opener.
Fundamentally, of course, humans require a minimum intake of calories to survive. Against an investment framework, this narrative means that whether we have inflation or deflation, ADM will likely be resilient. Effectively, the company sits at the bottom of the trade-down effect. Consumers will give up all kinds of discretionary and core products. However, they can’t fast indefinitely.
Another factor to consider as one of the stocks to buy this week focuses on passive income. No, Archer-Daniels is hardly generous with a forward yield of only 1.68%. Still, this adds to whatever capital gains you might enjoy. Moreover, the company features 49 years of consecutive dividend increases.
International Business Machines (IBM)
As a legacy technology giant, International Business Machines (NYSE:IBM) long failed to receive the love it arguably should have enjoyed. However, circumstances appear to be changing for the better. Since the beginning of the year, IBM stock gained 10%, which is far better than what the benchmark indices have to offer. Not only that, in the trailing month, IBM gained an un-IBM-like 15%.
What’s going on here? Fundamentally, Big Blue represents a grossly underappreciated tech play. For instance, IBM invested a significant portion of funds toward blockchain research and applications. However, the company focused on its enterprise-level relevancies, not on cryptocurrencies or crypto-mining rigs. Therefore, IBM rises while other blockchain-exposed market ideas suffer.
In addition, the tech firm offers a quiet way to extract fairly generous passive income. Per Dividend.com, IBM offers a forward yield of 4.47%. While the payout ratio stands a bit on the high side at nearly 69%, the company also commands 28 years of consecutive dividend increases. Therefore, it’s worth consideration as one of the stocks to buy this week.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.