How to Find the Best Shares to Buy Now
Investing in the stock market can be a rewarding way to grow your wealth over time. But picking the right shares to buy now is not easy. You need to consider various factors, such as the company’s fundamentals, growth prospects, valuation, dividend yield, and market sentiment.
In this article, we will share some tips on how to find the best shares to buy now, based on some of the criteria used by experts and analysts. We will also highlight some of the top picks from different sources, such as U.S. News, Forbes, and Bank of America.
What Makes a Good Share to Buy Now?
There is no definitive answer to what makes a good share to buy now, as different investors may have different goals, risk preferences, and time horizons. However, some of the common factors that can help you narrow down your choices are:
- Earnings and revenue growth: A good share to buy now should have a track record of growing its earnings and revenue over time, as well as a positive outlook for future growth. This indicates that the company has a competitive advantage, a loyal customer base, and a strong market position.
- Valuation: A good share to buy now should also have a reasonable valuation, based on metrics such as price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, price-to-sales (P/S) ratio, and price-to-free-cash-flow (P/FCF) ratio. These ratios can help you compare the share price with the underlying earnings, assets, sales, or cash flow of the company.
- Dividend yield: A good share to buy now may also offer a dividend yield, which is the annual dividend payment divided by the share price. A dividend yield can provide you with a steady income stream, as well as a cushion against market volatility. However, you should also check the dividend payout ratio, which is the percentage of earnings that are paid out as dividends. A high payout ratio may indicate that the company is not reinvesting enough in its growth or that the dividend is unsustainable.
- Market sentiment: A good share to buy now may also benefit from positive market sentiment, which is the overall attitude of investors towards a particular stock or sector. Market sentiment can be influenced by various factors, such as news events, analyst ratings, earnings reports, and industry trends. A positive market sentiment can boost the demand and price of a share, while a negative market sentiment can do the opposite.
Some of the Best Shares to Buy Now
Based on these criteria, here are some of the best shares to buy now, according to different sources:
- Interactive Brokers Group Inc. (IBKR): This online brokerage firm offers low-cost trading services to individual and institutional investors. It has a trailing five-year annualized earnings per share (EPS) growth of 22.5%, a forward five-year annualized EPS estimate of 23.9%, and a forward P/E ratio of 14.1. It also pays a dividend yield of 0.6%, with a payout ratio of 8%. It was ranked as one of the best stocks to buy by U.S. News.
- Taiwan Semiconductor Manufacturing Company Ltd. (TSM): This is the world’s largest contract chipmaker, supplying chips to various industries such as smartphones, computers, cars, and cloud computing. It has a trailing five-year annualized EPS growth of 20.5%, a forward five-year annualized EPS estimate of 21.5%, and a forward P/E ratio of 12.8. It also pays a dividend yield of 1.4%, with a payout ratio of 46%. It was ranked as one of the best cheap stocks to buy by Forbes.
- Nexstar Media Group Inc. (NXST): This is the largest television broadcasting company in the U.S., operating 199 stations across 116 markets. It has a trailing five-year annualized EPS growth of 17.1%, a forward five-year annualized