The 12 Best Stocks to Buy Now

Our list of the best stocks to buy now reflect the lesson of the past two years: Be ready for anything.

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When seeking out the best stocks to buy now, investors will need to be brave and patient in regard to timing, as well as agile as the stock market eventually transitions from bear market to bull market. Go ahead and add resolute to the character traits you'll need this year, because many market strategists say you can't get from one market to the other without going through a recession first. 

"Given the pace and intensity of Fed tightening, there's a strong likelihood that the U.S. will enter a recession in 2023," says Russ Koesterich, portfolio manager of the BlackRock Global Allocation Fund (opens in new tab). "That said, given strong household balance sheets and resilient consumption, our base case is that it will be a mild recession." 


What's the chance for a recession this year?

While gross domestic product (GDP) growth slowed to 2.1% in 2022, Kiplinger's current economic forecast calls for GDP to slow further to 1.0% in 2023 if there is a mild recession. But if the economy can avoid a recession this year, then growth will likely expand at about a 1.7% rate. Look for inflation to fall to below 4% by the end of 2023, down from the 5.0% seen at the end of March.

We expect the Federal Reserve to finally stop hiking interest rates in the third quarter of 2023, and by this time, the federal funds rate will likely be in the 5.25%-5.50% range, up from 0.25% in March 2022.

As for a potential recession, we have the odds of one starting later this year at 50-50.

For stocks, the turn from tighter monetary policy to easing will be a compelling all-clear signal – as will rock bottom valuations in prices. "History tells us that markets don't find a bottom until investors can see Federal Reserve rate cuts or a trough in economic activity on the horizon, or when valuations are so low that they price in a bear-case scenario," says Mark Haefele, chief investment officer at UBS Global Wealth Management. "Today, none of those conditions are in place."

How do I find the best stocks to buy?

Given the uncertain, sometimes roiling backdrop for stocks, where should investors look when seeking out the best stocks to buy now? A popular piece of advice among Wall Street strategists now is to resist the bargain-basement appeal of the most beaten-up stocks and focus instead on high-quality shares. "Investors should avoid volatile names and be cautious on both deep-value and unprofitable growth companies," Koesterich says. "Instead, emphasize quality with a focus on earnings consistency and good profitability." 

Generous and growing dividends are a hallmark of high quality and are likely to make up a much bigger portion of total returns than they have recently, says Caroline Randall, a portfolio manager at mutual fund company Capital Group (opens in new tab).

And now may be a good time to tilt toward value-oriented companies and small-cap stocks, both longtime underperformers that are showing signs of new life. "We would stick with value. These cycles last a while," says Ryan Detrick, chief market strategist at money management firm Carson Group (opens in new tab). Sectors typically grouped in the value style include energy, financials, industrials and materials.

So, with all of this in mind, here are 12 of the best stocks to buy now. To compile the list, we looked for high-quality companies with solid fundamentals like strong earnings and revenue growth, as well as free cash flow, and many with a value tilt as measured by their forward price-to-earnings (P/E) ratios. The names featured here vary by size and industry and are not meant to compose a diversified portfolio. But all, for one reason or another, are well positioned to benefit from a transition to a bull market from a bear market.

Data is as of April 12. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.  

Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.


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