In his tireless search to detect stocks that have upside potential and competitive advantages, Morningstar experts now look at three US companies that they consider clearly undervalued. Is about Moderna, Hasbro and ResMed. According to the analysis of the renowned American financial information and advisory company with these papers You can earn between 20% and up to 70%.
But they also focus on the growing dividend stocks that are attractive to many investors as they are companies that are usually profitable and financially healthy, two qualities that investors prioritize during economic downturns.
These types of companies generally enjoy, according to Morningstar, important competitive advantages that allow them to pass on price increases and thus maintain margins in periods of higher inflation. They are companies that have a history of dividend growth and ability to sustain partner remuneration over time.
With all these premises, Morningstar strategists highlight three other growing dividend stocks that they also consider clearly undervalued. Is about Bristol-Myers Squibb, Nike and Gilead Sciences.
They are companies that, despite having had an important performance this year, still have a significant margin of increase compared to their target prices. These three stocks will outperform the market in 2024 but still have a way to go, according to Morningstar. But let’s look at each house in particular.
Investment Opportunities: Moderna Stock
The first name of this selection is the pharmaceutical modern which stands out for its vaccines in development that could meet important unmet needs. The company also has sufficient financing and the necessary technological capabilities to launch them on the market.they explain.
Although they expect the multinational to continue liquidating cash in 2024 and also in 2025, they are confident that it will be profitable in 2026. As for the target price, they place it at $227, a value 70% higher than its current price.
Investment Opportunities: Hasbro Stock
Secondly, they recommend the toy store Hasbro to incorporate into the portfolios that knew how to consolidate an economic base thanks to the strength of brands such as Transformers, My Little Pony or Nerf. They also highlight that the group has a entrenched distribution network and believe their cash flow will continue to grow thanks to their cost reduction program.
In relation to their target price, they establish it in the $84, with a potential of 40% compared to current market prices.
Investment Opportunities: RedMed Stock
As to ResMedone of the largest manufacturers of breathing devices used to treat sleep apnea, highlight that Their products are rooted among patients and doctors, which is why they rate their economic base as healthy.
They also assure that the company still has a long way to go to achieve additional growth in both developed and emerging markets. In this scenario and after praising the growth of its sales and the recovery of its gross margins, They place the theoretical value of their securities at $264, with a potential of 20% compared to their current price.
Investment Opportunities: Bristol-Myers Squibb Stock
Regarding the most attractive growing dividend stocks, the first of them is the drug manufacturer Bristol-Myers Squibb which has consolidated an economic base thanks to its line of patent-protected products, an entrenched sales force and economies of scale.
According to them, the company divested its diabetes business, its medical imaging and wound care divisions, and also its nutritional business in a strategy aimed at prioritizing high-margin specialty drugs, an approach that Morningstar sees as wise. Likewise, they indicate that their dividend seems secure for the next few years and they set the 63 dollars the target price of its shares, with a upside potential close to 50% from current quote levels.
Investment Opportunities: Nike Stock
The second name of this selection is Nikethe largest sports clothing and footwear company in the world that, in its opinion, enjoy extensive competitive advantages. Although in the short term, the multinational expects declines in sales due to lower consumer demand, Morningstar considers that this security is suitable for investors interested in the long term.
They trust that Nike will recover its tone thanks to the investments in products and in the supply chain that it is carrying out, while at the same time they describe its current financial situation as excellent. Regarding the theoretical value of their securities, they establish it in the 129 dollars, with an upward margin close to 40% from current market prices.
Investment Opportunities: Gilead Sciences Stock
Third, Morningstar is in favor of including Gilead Sciences in portfolios. A recommendation they base on the potential of their therapies to treat infectious diseases and their solid competitive advantages.
Although the company needs a stabilization of the hepatitis virus market, its innovations and the possible acquisitions it undertakes will allow it to grow again, explain Morningstar analysts who set a target price of 97 dollars, with a potential of just over 40% from current quote levels.
Source: Ambito
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