Over the course of 18 months, investors enjoyed a historic high in broad-based recovery Standard & Poor’s 500. Since hitting a bear market bottom in March 2020, the widely followed indicator has doubled.
However, crashes and corrections are a normal part of investing in the largest source of wealth on the planet. Last Monday, September 20, the S&P 500 worked its way through its worst single session performance in four months. While it’s impossible to tell if this is the start of a full-blown correction or just a short-term sell-off driven by emotion, one thing is for sure: a plummeting market is always a good time to put your money to work. Brand name and time-tested companies.
If the market continues to decline in the coming days or weeks, long-term investors should consider buying stocks with the following five brand names.
Master Card Credit Card
History has shown that any decline in the processing of giant payments Master Card Credit Card (NYSE: MSc) An opportunity for investors to acquire this high-margin company at a discount.
Mastercard is a cyclical company that benefits from spending a lot of its time in the sun. Although recessions and recessions are a normal part of the economic cycle, periods of economic expansion often last for years. Mastercard can benefit from consumer and institutional spending during these extended periods of expansion. It is a simple numbers game that I always prefer Mastercard.
Another reason for being a successful company is that they avoid lending. Although Mastercard forgoes the opportunity to generate interest and fee income as a lender, it also avoids the credit arrears that accompany the inevitable recessions. Not having to set aside capital to cover these delays is a big reason for its profit margin consistently north of 40%.
Mastercard is the obvious No. 2 payment processor in the United States, the world’s preeminent consumer market, and offers a long runway for global expansion. If the market is collapsing, this is a no-brainer purchase.
This may not be the first branded stock that comes to mind when Wall Street uncertainty arises, but the ‘do-it-yourself’ chain of home improvement Home Depot (NYSE: HD) It is a really smart buy for any market weakness.
While you might get the impression that Home Depot is an all-cyclical stock, the company has a way of hedging its bets, so to speak, in any economic environment. It obviously benefits during periods of expansion with strong demand from commercial customers, but what is often overlooked is that home remodeling has become popular during periods of downturn. With fewer people moving around during contractions or downturns, it creates the perfect scenario for homeowners to turn things around.
Home Depot’s strong investments in digitization should pay dividends, too. Customers who visit its physical stores are still the bread and butter for this company, but the ability to integrate the physical and digital experience should lead to faster sales growth and a better customer experience overall. There’s no reason Home Depot can’t maintain double-digit direct-to-consumer sales growth for the foreseeable future.
technology stock from Broadcom (NASDAQ: AVGO) It is another branded company that investors can pile into if the stock market turns lower.
Although Broadcom’s semiconductor solutions are used in a number of industries, smartphones have long been the company’s main source of revenue. Deploying 5G wireless infrastructure is particularly important.
It’s been nearly a decade since consumers and businesses were offered a substantial upgrade in download speeds. This should lead to a multi-year smartphone replacement cycle that will benefit Broadcom, which makes 5G chips and other accessories found in smartphones.
Other than just wireless devices, Broadcom appears to be sitting in a veritable goldmine as companies shift more and more of their data to the cloud. The company provides connectivity and access chips to data centers, which are necessary to store this data.
Want an extra reason to take the initiative? Broadcom’s quarterly dividend has grown more than 5,000% in less than 11 years. With much of its production capacity booked months in advance and a 2.9% return to boot, Broadcom can be the rock of your tech wallet.
Pharmaceutical stocks are an excellent place to park your money if and when stock market volatility is high. Brand-name drug stock to buy handpiece, if the market continues to decline, is Bristol-Myers Squibb (NYSE: BMY).
What makes this company so special is its organic and acquisition-driven growth. Starting with the previous, Bristol-Myers is on track to generate nearly $10 billion from Eliquis this year. Eliquis is the world’s leading oral anticoagulant and was developed in collaboration with Pfizer.
There is also the cancer immunotherapy Opdivo, which is approved in 10 indications and is being examined in dozens of clinical trials as either a monotherapy or a combination therapy. Opdivo already brings in about $7 billion in annual sales.
On the buyout front, Bristol-Myers Squibb created quite a stir by acquiring cancer drug developer and immunologist Celgene in 2019. The crown jewel of this acquisition was the multiple myeloma drug Revlimid, which last year topped $12 billion in sales. A combination of label expansion, longer duration of use, improved cancer screening diagnoses, and strong pricing power have helped Revlimid deliver double-digit annual growth for more than a decade.
The ability to cut Bristol-Myers Squibb’s earnings by less than eight times the forward year’s earnings is an absolute steal.
Last but not least, opportunistic long-term investors can buy a cloud-based CRM software provider. Salesforce.com (NYSE: CRM) Hand over your fist if the market falters.
For those who may not be familiar with CRM software, it is used by companies to enhance customer relationships and expand sales. It can be used to oversee product and service issues, handle online marketing campaigns, and perform predictive sales analytics.
Salisphorus slips into the picture as the king of the mountain. It held just 20% of the global CRM market share, based on revenue, as of the first half of 2020, according to an IDC report. The next four competitors did not even combine to equal Salesforce’s market share. This puts it at the center of a sustainable double-digit growth trend for consumer-facing businesses.
And, like Bristol-Myers, he’s been an acquisition star. CEO Marc Benioff has overseen the dividend-cumulative acquisitions of MuleSoft and Tableau, and recently completed the purchase of the cloud-based enterprise communications platform Slack Technologies. Slack should help Salesforce sell their solutions to small and medium-sized businesses.
With Benioff claiming $50 billion in annual sales in five years, more than double the $21.3 billion reported in fiscal 2021, Salesforce checks all the boxes as a no-brainer purchase.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.