Investing in the stock market can be a rewarding way to grow your wealth over time, especially when interest rates are low and inflation is high. However, picking the right stocks to buy now can be challenging, as there are many factors to consider, such as valuation, growth potential, dividend yield, competitive advantage, and market trends.
Fortunately, Forbes Advisor has compiled a list of their best stocks to buy now, based on their analysis of various criteria, such as earnings growth, price-to-earnings ratio, price-to-sales ratio, and revenue growth. These stocks span different sectors and industries, such as technology, consumer discretionary, healthcare, industrials, and financials. Here are the 10 best stocks to buy now according to Forbes Advisor:
American Homes 4Rent (AMH)
- Forward P/E Ratio: 75.8
- Price/Sales Ratio: 8.5
- 3-Year Avg. Annualized Revenue Growth: 9.9%
American Homes 4Rent is a real estate investment trust (REIT) that owns and operates single-family rental properties in the U.S. The company has a portfolio of over 54,000 homes across 22 states, and benefits from the strong demand for affordable and spacious housing amid the pandemic. The company also has a robust development pipeline of new homes, which will increase its rental income and occupancy rate.
The company has a stable and diversified tenant base, with an average lease term of 2.6 years and a retention rate of 79%. The company also pays a quarterly dividend of $0.10 per share, which translates to a yield of 0.7%. The company has a strong balance sheet, with low leverage and ample liquidity. The company is expected to grow its earnings by 25% in 2023 and 15% in 2024.
Bath & Body Works (BBWI)
- Forward P/E Ratio: 10.4
- Price/Sales Ratio: 1.1
- 3-Year Avg. Annualized Revenue Growth: -12.9%
Bath & Body Works is a specialty retailer of personal care products, such as body lotion, shower gel, fragrance, candles, and soap. The company operates over 1,700 stores in the U.S. and Canada, as well as online and through third-party channels. The company has a loyal customer base, with over 30 million active members in its loyalty program.
The company has been resilient during the pandemic, as its products cater to the increased demand for self-care and wellness. The company has also been investing in digital transformation, omnichannel capabilities, product innovation, and international expansion. The company is expected to grow its earnings by 11% in 2023 and 8% in 2024.
Datadog (DDOG)
- Forward P/E Ratio: 70.1
- Price/Sales Ratio: 19.1
- 3-Year Avg. Annualized Revenue Growth: 55%
Datadog is a cloud-based software company that provides monitoring and analytics solutions for IT infrastructure, applications, and business performance. The company serves over 16,000 customers across various industries, such as e-commerce, media, gaming, healthcare, and education. The company’s platform integrates data from various sources and provides insights into performance issues, security threats, user behavior, and business outcomes.
The company has been growing rapidly due to the increasing adoption of cloud computing, digital transformation, and data-driven decision making among enterprises. The company has also been expanding its product portfolio with new offerings such as security monitoring, network performance monitoring, user experience monitoring, and synthetic testing. The company is expected to grow its revenue by 36% in 2023 and 29% in 2024.
Dexcom (DXCM)
- Forward P/E Ratio: 76.4
- Price/Sales Ratio: 16.3
- 3-Year Avg. Annualized Revenue Growth: 23%
Dexcom is a medical device company that develops and markets continuous glucose monitoring (CGM) systems for people with diabetes. The company’s CGM systems consist of a sensor that measures glucose levels under the skin, a transmitter that sends data wirelessly to a receiver or a smartphone app, and a software that displays and analyzes the data.
The company has a leading position in the CGM market, with over two million users worldwide. The company benefits from the growing prevalence of diabetes, the increasing awareness of the benefits of CGM, and the innovation of its products. The company is expected to grow its revenue by 18% in 2023 and 16% in 2024.
Fortive (FTV)
- Forward P/E Ratio: 21.1
- Price/Sales Ratio: 4.7
- 3-Year Avg. Annualized Revenue Growth: -5.8%
Fortive is an industrial conglomerate that operates in four segments: intelligent operating solutions, precision technologies, advanced healthcare solutions, and field solutions. The company’s products and services include measurement and monitoring instruments, automation and control systems, software and analytics, medical devices and equipment, and environmental solutions. The company serves customers in various markets, such as manufacturing, healthcare, transportation, energy, and defense.
The company has been undergoing a strategic transformation, divesting non-core businesses and acquiring high-growth companies. The company has also been investing in digital capabilities, innovation, and operational excellence. The company is expected to grow its earnings by 14% in 2023 and 11% in 2024.
Lamb Weston (LW)
- Forward P/E Ratio: 17.9
- Price/Sales Ratio: 2.8
- 3-Year Avg. Annualized Revenue Growth: 12.1%
Lamb Weston is a food processing company that specializes in frozen potato products, such as french fries, mashed potatoes, hash browns, and potato skins. The company sells its products to foodservice operators, retailers, and distributors in over 100 countries. The company has a leading market share in the U.S. and a strong presence in international markets, especially in Asia and Latin America.
The company has been recovering from the impact of the pandemic, as the reopening of restaurants, hotels, schools, and stadiums boosts the demand for its products. The company has also been expanding its production capacity, launching new products, and enhancing its distribution network. The company is expected to grow its earnings by 16% in 2023 and 10% in 2024.
Lear (LEA)
- Forward P/E Ratio: 9.3
- Price/Sales Ratio: 0.4
- 3-Year Avg. Annualized Revenue Growth: 9.2%
Lear is an automotive supplier that manufactures and distributes seating systems and electrical systems for vehicles. The company serves major automakers such as Ford, General Motors, Volkswagen, BMW, Toyota, and Hyundai. The company has a global footprint, with operations in over 40 countries.
The company has been benefiting from the recovery of the automotive industry, as vehicle sales rebound from the pandemic-induced slump. The company has also been capitalizing on the growth of electric vehicles, hybrid vehicles, and connected vehicles, as its products enable higher efficiency, safety, and comfort. The company is expected to grow its earnings by 13% in 2023 and 9% in 2024.
Netflix (NFLX)
- Forward P/E Ratio: 27.9
- Price/Sales Ratio: 6
- 3-Year Avg. Annualized Revenue Growth: 12.4%
Netflix is the world’s leading streaming entertainment service, with over 200 million paid members in over 190 countries. The company offers a wide variety of content, including original movies, series, documentaries, and comedy specials. The company also produces and distributes content in local languages, catering to different tastes and preferences.
The company has been growing steadily due to the increasing demand for online entertainment, especially during the pandemic. The company has also been investing heavily in content creation, acquisition, and licensing, as well as expanding its presence in emerging markets, such as India, Brazil, and Africa. The company is expected to grow its revenue by 15% in 2023 and 13% in 2024.
Walt Disney (DIS)
- Forward P/E Ratio: 17.5
- Price/Sales Ratio: 1.8
- 3-Year Avg. Annualized Revenue Growth: 7.6%
Walt Disney is a diversified entertainment company that operates in four segments: media networks, parks and experiences, studio entertainment, and direct-to-consumer and international. The company owns some of the most iconic brands and franchises in the world, such as Disney, Pixar, Marvel, Star Wars, ESPN, National Geographic, and Hulu.
The company has been recovering from the impact of the pandemic, as its theme parks reopen, its movie theaters resume operations, and its live sports resume broadcasting. The company has also been growing rapidly in its streaming business, with over 170 million subscribers across its platforms, such as Disney+, ESPN+, and Hulu. The company is expected to grow its earnings by 49% in 2023 and 21% in 2024.
Wells Fargo (WFC)
- Forward P/E Ratio: 9.3
- Price/Sales Ratio: 2.1
- 3-Year Avg. Annualized Revenue Growth: -0.2%
Wells Fargo is one of the largest banks in the U.S., providing banking, investment, mortgage, and consumer finance services to individuals, businesses, and institutions. The bank has over $1.9 trillion in assets and over 70 million customers.
The bank has been improving its financial performance and reputation after resolving several regulatory issues and scandals that plagued it in recent years.
