As the year draws to a close, 2025 faces many issues, such as potential new trade tariffs, geopolitical conflicts, and the inauguration of a new US President. Each of these themes is creating volatility in the stock market, so investors will indeed need to tread carefully in the coming months to avoid potential pitfalls and pockets of volatility.
This is where today’s list of consumer staples stocks becomes useful, as it offers both safety and low volatility. Since every portfolio needs a potential source of growth beyond that security, there is also a worthy addition in the financial sector that can benefit from current real estate trends. Security, growth and the ability to start 2025 on the right foot so that the rest of the year is an open field for individual games and individual achievements.
This list includes stocks such as McDonald’s company. New York Stock Exchange: MCD for stable and predictable demand, which makes it easier for analysts to evaluate and forecast the company’s financial performance. Next up is the most popular real estate investment trust (REIT). Realty Income Company New York Stock Exchange: Ohand monthly dividend payments that currently outpace inflation and GDP growth forecasts. Finally, a potential recovery in mortgage lending could send stocks higher Rocket Companies Inc. New York Stock Exchange: RKT.
Why McDonald’s stock offers great value at its current price
McDonald’s today
(As of December 16, 2024 ET)
- 52 week range
- $243.53
▼
$317.90
- Dividend yield
- 2.38%
- P/E ratio
- 26.14
- Target price
- $320.50
McDonald’s value proposition is not only based on affordable prices for customers; they also apply to investors today. With the stock down to just 87% of its 52-week high while the broader S&P 500 index was right at its all-time highs, investors who understand the nature of low-beta stocks will be calling for the gap to be narrowed.
McDonald’s stock, with a beta of 0.7, won’t do investors much good in the coming months, but that’s the whole point of holding on to the name for portfolio protection and future stability. That’s why Wall Street analysts continue to hold this company highly, regardless of its economic cycle.
In particular, Truist Financial analysts now recommend buying McDonald’s shares with a target price of up to $342 per share. They call for net upside potential of as much as 16% from today’s levels, a tall order for a company that now trades at a market capitalization of $214 billion.
Other benefits of owning McDonald’s include the company’s dividend, which currently stands at $7.08 per share, providing up to a 2.4% annual yield. These yields don’t quite match the 2.7% inflation rate, but they still give investors a near-breakeven inflation rate, on top of double-digit upside potential from rising prices.
Ultimately, institutional investors are another indicator that gives retail investors insight into the sentiment surrounding McDonald’s stock. Geode Capital Management increased its assets by 1.4% as of November 2024, bringing its net position to $4.8 billion today, or 2.2% ownership in the company.
How Real Estate Dividends Can Boost Your Purchasing Power in 2025
Real estate income today
Real estate income
(As of December 16, 2024 ET)
- 52 week range
- $50.65
▼
$64.88
- Dividend yield
- 5.79%
- P/E ratio
- 52.00
- Target price
- $63.58
Monthly dividends can benefit investors who distribute real estate income in two ways. First, it allows them to continue to buy more shares each month and increase the monthly income effect. Secondly, it increases investors’ liquidity and purchasing power so they can take advantage of opportunities that may arise later in 2025.
The company is currently offering shareholders a net payout of $3.16 per share, which equates to an annualized yield of 5.8%. This doubles the inflation rate, so investors receive a nice premium on their cash and purchasing power in 2025. However, the benefits of owning Realty Income stock don’t end there.
UBS Group analysts have confirmed their Buy recommendation for Realty Income shares as of November 2024. This time, they set the company’s price target at $71 per share, which implies a net upside of as much as 29.3% from the initial price. Exchange trading today.
Why rocket stocks could soar as the mortgage industry recovers
Rocket companies today
Rocket companies
(As of December 16, 2024 ET)
- 52 week range
- $10.87
▼
$21.38
- Target price
- $14.33
Now that the Federal Reserve is set to cut interest rates again in December 2024, and CME Group’s FedWatch tool now estimates the likelihood of a rate cut to be more than 96%, the mortgage industry could be facing some tailwinds. As rates drop, so do mortgage rates, allowing some would-be home buyers to get out of the game.
This is especially true since the mortgage market index is now at its 1996 low, meaning the risk/reward profile in mortgage stocks is incredibly attractive today. This is where rocket stocks come into play today and where Wall Street analysts see upside potential as Morgan Stanley analysts see a price of $18 per share.
To prove these views correct, the stock would need to rise to 47.5% from where it is trading today. This attractive growth potential is bolstered by earnings per share (EPS) forecasts for the next 12 months, in which analysts expect earnings of $0.14 versus today’s $0.08, a net growth rate of 75%, to act as a tailwind for the stock. .
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