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Tuesday, May 24, 2022

High quality stocks at the top of my watch list!

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There are also some high quality stocks on my watch list. That means companies that impress with their quality and that can dominate every phase of the market with a long-term orientation. What they contain in individual cases naturally needs some context.

The two high-quality stocks that are high on my watch list right now are walt-disney (WKN: 855686) and capital store (WKN: A12CRU). A follow-up purchase could be imminent in the short term.

Walt Disney High-Quality Stock: Near Bottom

Walt Disney is a high quality first stock that I now see high on my watch list. With a current share price of €125, the 52-week low of around €115 is not too far away. This, in turn, may be due to the fact that there are some stress factors. In addition to the pandemic, it is above all the weak growth that has made itself felt recently.

Even so, Walt Disney still has a lot of quality. Disney+ is a solid streaming service that has grown almost 129.8 million subscribers at lightning speed. Across the group, the 200 million user mark should drop soon. There are also strong amusement parks awaiting willing consumers and their billions in sales. That can be a combination of long-term value growth for dumb investors.

So to me, Walt Disney is becoming a blue chip stock near its nadir, which also makes me wonder if the sum of the individual parts isn’t significantly more valuable in the long run than the compounding of current market of $252 billion. I think that scenario could definitely be there.

Buffett Stocks With Dividend Yields Above 5% Are Rare

Buffett stocks that generate more than 5% dividends are rare. High quality stocks do not normally exhibit this trait. Precisely because sheer quality hardly goes hand in hand with cheap reviews, the Oracle of Omaha is fated to pay close attention.

However, one of the things that is causing Store Capital to correct to a more favorable level now is inflation. Even quality REITs are having it worse. Purely visual, because sometimes fixed-term deposit alternatives are again more attractive. But also in terms of financing future growth or external funds. So there are business-oriented implications, but not large-scale ones.

With a dividend yield currently in excess of 5.2%, Store Capital is therefore a premium stock with a strong dividend. The payout rate of around 70.6% also shows that investors really don’t need to worry about sustainability with the REIT. For me, this is and remains a combination that can deliver strong long-term returns.

High Quality Stocks item is high on my watch list! first appeared in The Motley Fool Germany.

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Vincent owns shares in Store Capital and Walt Disney. The Motley Fool owns stock and recommends Walt Disney and recommends STORE Capital and the following options: $145 January 2024 Long Call on Walt Disney and $155 January 2024 Short Call on Walt Disney.

Motley Fool Germany 2022

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