Short-term volatility and unpredictability are some of the guarantees Wall Street offers investors. Since the green flag waved in January 2020, all three major stock indexes have swung back and forth between bear and bull markets a few times.
however, the Dow Jones Industrial Average, S&P500And Nasdaq Composite have a long track record of riding stock market corrections firmly in the background and moving higher over the long term. This practical guarantee means that any time can be the ideal time to invest.
The great thing about putting your money on Wall Street is that most online brokers have completely eliminated minimum deposit requirements and commission fees for common stock trades on major US exchanges. For regular investors, this means that any amount of money – even $100 – can be the perfect amount to use in the stock market.
If you have $100 ready to invest, and this is cash that you are absolutely certain won’t be needed to pay bills or cover emergencies when they arise, the following three stocks stand out as a no-brainer purchase at this point.
Pfizer
The first genius stock that is now begging to be bought at $100 is the pharmaceutical titan Pfizer (NYSE:PFE).
It’s pretty incredible what a difference a few years has made for Pfizer stock. During the early stages of the COVID-19 pandemic, the company seemingly could do no wrong. In 2022, the COVID-19 vaccine (Comirnaty) and oral treatment (Paxlovid) generated combined sales of more than $56 billion. This year, the company expects sales from its two-star COVID-19 therapies to reach $8 billion.
While it may be disappointing that an estimated $48 billion in annual revenue will be wiped out in two years, the $8 billion in revenue that Pfizer expects to bring in collectively from Comirnaty and Paxlovid could far exceed what the company generated in revenue as 2020 came to an end. . From a sales perspective, Pfizer is a much better company now than it was three years ago.
More importantly, the non-COVID product portfolio has not stopped growing. Despite repeatedly struggling with the patent cliff, Pfizer achieved currency-neutral sales growth of 7% last year, excluding Comirnaty and Paxlovid. In 2024, the company expects operating revenue growth of 3% to 5%, excluding the impact of its COVID-19 therapies.
The key driver for Pfizer is the Specialty Care segment, which delivered 11% operational growth in 2023, net of currency fluctuations. The company’s Vyndaqel product family generated $3.32 billion in sales last year (up 36% year-over-year), while its sickle cell disease drug Oxbryta more than quadrupled its sales to $328 million.
Another reason to be optimistic about Pfizer’s future is the now completed acquisition of Seagen, the developer of cancer drugs. While this deal will reduce Pfizer’s earnings per share by $0.40 in 2024, the combination of the two companies should deliver significant cost savings and vastly expand Pfizer’s cancer drug pipeline.
A full-year earnings multiple of 9.5, coupled with a 6.5% yield, makes Pfizer a top buy if you have $100 to invest.
Philip Morris International
A second phenomenal stock that currently allows for a no-brainer purchase with $100 is the tobacco giant Philip Morris International (NYSE:PM).
It’s no secret that tobacco companies are facing unprecedented challenges. Over time, consumers have become aware of the potential dangers of long-term tobacco use. As a result, cigarette shipments have stagnated or declined for most tobacco companies. But the good news for current and future investors in Philip Morris is that the company has clearly defined competitive advantages to help it overcome these challenges.
The obvious advantage for tobacco companies is that they typically have exceptional pricing power. Tobacco contains nicotine, an addictive chemical. Historically, smokers have shown a willingness to absorb price increases that offset or more than offset declines in cigarette deliveries.
Another competitive advantage that Philip Morris offers investors is its geographic diversity. This is a company that offers its products in more than 180 countries. For example, if tighter regulations in select developed markets hurt cigarette shipments, Philip Morris can likely count on volume growth from emerging markets to offset some or all of this weakness. Operating in so many countries allows the company to generate predictable operating cash flow each year.
Philip Morris is also aggressively expanding its product portfolio into the smokeless segment. In 2023, it shipped more than 125 billion heated tobacco units (HTU) – an improvement of almost 15% over the previous year – and increased its HTU share in the markets where it sells its IQOS heated tobacco device by 120 basis points up to 9.1%. While it may still be a while before smokeless products become a significant percentage of Philip Morris’ total sales, the company has laid the foundation for future growth.
Shares of Philip Morris International can now be snapped up at a 17% discount to average earnings over the next five years. Best of all, patient investors can earn an annual return of 5.9%.
Baidu
The third stock that is an absolute no-brainer buy right now at $100 is based in China Baidu (NASDAQ: BIDU).
Chinese stocks currently pose two risks. For starters, the reopening of the Chinese economy after strict COVID-19 containment measures has not gone as planned. Economic data shows that growth is weaker than expected.
The other problem with Chinese stocks is the unpredictability of regulators. Corporate surveillance in China is one lot different from the US, and that is generally reflected in the underlying valuations of most China-based companies.
Despite these concerns, Baidu is showing all the hallmarks of a screaming buy right now.
The company’s bread-and-butter money generator is the Internet search engine. Because China’s economy is so tightly regulated, Baidu has had no trouble dominating its peers. In March, it was responsible for more than 60% of the Internet search share in the world’s second-largest economy by gross domestic product (GDP). It is clear that Baidu is the first choice of companies that want to reach Chinese consumers with their message.
To further reinforce this point, Baidu should benefit as the Chinese economy gets back on track. It will take time to iron out the kinks in the supply chain that three years of very strict COVID-19 lockdowns have created. Once these are clear, it wouldn’t be a surprise if the Chinese economy were to maintain annual GDP growth above 5% and further boost Baidu’s advertising revenue.
Baidu is also a leading stock in artificial intelligence (AI). The company’s AI Cloud ranks fourth in cloud services infrastructure spending in mainland China as of March 2023. Enterprise spending on cloud services is still in its infancy, and the margins associated with cloud services are significantly juicier than those on an advertising basis.
Furthermore, Baidu is the parent company of Apollo Go, the world’s largest autonomous taxi company. On January 2, Apollo Go surpassed 5 million autonomous rides.
To wrap things up in a nice bow, Baidu ended 2023 with more than $28 billion in cash, cash equivalents and miscellaneous investments. The country has more than enough money to invest in fast-growing initiatives and to navigate the choppy waters that lie ahead. At eight times full-year earnings, Baidu may never be this cheap again.
Should you invest €1,000 in Pfizer now?
Consider the following before buying shares in Pfizer:
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Sean Williams has positions in Baidu. The Motley Fool has and recommends positions in Baidu and Pfizer. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.
3 No-Brainer Stocks to Buy Right Now with $100 was originally published by The Motley Fool
