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Three Promising Stocks to Pursue as S&P 500 Stays Steady

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1. Lockheed Martin Corp. (LMT)

As the S&P 500 navigates a period of relative stagnation, defense giant Lockheed Martin Corp. offers potential for considerable return. Established in 1912, this Bethesda-based aerospace, defense, security, and technology company has demonstrated a robust track record of stability and growth. Lockheed’s unique positioning in aerospace and defense gives the company a significant competitive edge amid geopolitical tensions and the tech sector’s volatility.

Lockheed’s strong order backlog, estimated at $147 billion in Q3 2021, suggests sustained revenue and profit in future periods. The company’s dividend yield of 2.87% offers an added incentive for long-term investors, comfortably outperforming the sector’s average yield. The company has also demonstrated a consistent trend of share buybacks, enhancing shareholder value.

2. NEXT plc (NXT)

Staying within industries boasting relative stability even as the S&P 500 treads water, clothing, footwear, and home products retailer, NEXT plc, makes for an excellent investment prospect. This UK-based company features a blend of physical outlets and online presence, ensuring adaptability to changing consumer behavior and strong sustainability post-pandemic.

While the company’s 2020 performance took a hit due to COVID-19 restrictions, recently published sales and profits figures show signs of recovery and impressive resilience. Moreover, NEXT’s forward-thinking strategy, marked by strategic partnership with brands like Gap and a focus on environmental sustainability set it apart and position it favorably for future growth.

3. Alibaba Group (BABA)

The final entry in our trio of stock ideas is the Chinese multinational technology company, Alibaba. Despite facing regulatory challenges in its home country and amid a turbulent international market environment, the company’s diverse portfolio allows it to weather these storms.

Alibaba’s extensive ecosystem includes e-commerce, entertainment, digital media, and cloud computing. It leverages its dominance in e-commerce and other sectors through Alipay, while further expanding into untapped rural Chinese markets. Additionally, Alibaba’s cloud business, although facing strong competition, is growing rapidly and is considered a significant driver for future earnings growth. Long-term investors may view the company’s recent stock decline as a discounted entry point.

Other factors favoring Alibaba include its plan to buyback $15 billion of stocks by 2022 end, which adds optimism amid the company’s weak performance recently. Plus, Alibaba’s strong fundamentals such as a solid balance sheet, impressive revenue, and profit growth make it a compelling investment.

There is an inherent risk involved with investing in the stock market, and these suggestions are by no means guaranteed to be profitable. However, Lockheed Martin Corp., NEXT plc, and Alibaba Group are all well-established companies with robust growth strategies, making them worthy considerations as the S&P 500 treads water. Always consult with a financial advisor before making any investment decisions.

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