Top 5 stock investments for 2017
Investing in stocks is one way of investing money for the future. Some of the top stock investments for the year 2017, include:
General Motors (GM)
People are under the impression the business cycle for automobile manufacturers has currently reached its zenith. However, that does not necessarily mean that things will only spiral downward from now on. Earnings might not be badly affected. Also, rapidly evolving technology that has electric and self-driven vehicles as the next big thing means General Motors is bound to benefit from it. General Motors, in fact, has both the market and the technology to beat Tesla at electric and hybrid vehicle manufacturer. General motors, as of now, trades at a P/E (price to earning ratio) of 4.3 and it is understood that the ratio will expand in the near future to almost ten, causing GM stocks to rise substantially. Should this happen, the company will double in value. From the current price of $38, it can go as high as $80 in a year or two. This is one of the top stock investments.
ONE Gas (OGS)
Natural gas has been a light at the end of the tunnel in an energy sector that was increasingly running out of natural resources. Thanks to improved technology, processes like hydraulic fracturing and horizontal drilling have helped produce huge supplies of natural gas. This has caused lowering of prices and growth of consumption. Companies that have focussed on distributing energy that is environment-friendly have thrived, ONE Gas included. There are several logically sound reasons that make ONE Gas one among the top stock investments for the year 2017. One, it is located in an area that is known for its population expansion. And this, in turn, would help support appreciation in prices that may happen in the future. Two, rate commissions of today allow local distribution companies an above average rate of return when they make capital improvements. So, if ONE Gas spends capital to replace old pipes with new, it is positioned to get high returns on it. This helps improve the earnings per share and encourages dividend growth as well as price appreciation. Third, thanks to the reasons already described, other companies dealing in a similar business might want to buy ONE Gas. Which, of course, would increase its stock value in the days to come.
USG Corporation (USG)
USG is one of the several companies that is into using technologies and designs that are environmental friendly in their constructions. This is one of the top stock investments of this year. It is what is referred to as a Green Building Policy. USG has strong fundamentals and shows consistent growth, year after year. It is, in fact, ranked in the top quartile of companies of its kind. A founding member of the US Green Building Council, even with its low free float stock, it is known as a trailblazer in green building and is considered a to be right at the top in the United States. Research shows that demand for green building might grow at a rate of 9.5 percent annually to touch $69 billion by the year 2019. Using green building materials is significantly beneficial to the environment, the owner of the building and its occupants. Lower costs of energy, lower costs of maintenance, and increased health and productivity, all contribute to its popularity. Data shows that green building has been consistently doubling every year for the past three years. It is understood that it will grow at a CAGR of nearly 13 percent by the year 2020.
Independence Realty Trust (IRT)
Increase in interest rates have affected the real estate market. The worst hit are the apartment REITs, or real estate investment trusts, most of which are at 20 percent below their 52 week peaks. IRT can become a top stock investment if it raises its equity in 2017. IRT has a dividend that makes it unique. It has a yield of 8 percent that is twice that of its nearest competitor in the field. The biggest risk it faces is increasing interest rates. However, towards the latter part of 2017, interest rates are believed to be less likely to increases as much. IRT offers discount valuations that are unparalleled and should investors figure this out, IRTs stock would show a great performance with very little risk involved.
Forterra (FRTA)
FRTA manufactures water infrastructure products. This is one of the top stock investments that enjoys $1 billion in income every year and has a solid platform to manufacture more products soon. It is also in the process of announcing a couple of acquisitions in 2017. Ventures that boast of large barriers to entry are worth taking note of and FRTA is one of them. This is because of limited competition and reasonable pricing for its products. Thought Forterra has about $1.1 billion worth of debt, it is believed that this debt would decrease in the coming year thanks to improved cash flow. An increased cash flow would lead to a bigger price to earnings ratio for its stock. If FRTA can successfully acquire a couple of companies soon, it is estimated that it can trade stock at $30 in the coming year.