Today, we discuss three must-own stocks as major Wall Street indices reach new highs. The rise in share prices of technology stocks and supportive economic data hinting at potential Federal Reserve policy easing have contributed to investor optimism. So far in 2024, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which tracks the S&P 500 index, is up 13%. Similarly, the Invesco QQQ Trust ETF (NYSEARCA:QQQ), which tracks the Nasdaq-100, rose 14% since January, while the SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA), which tracks the Dow Jones Industrial Average, returned about 4%.
Currently, Wall Street is witnessing companies from a blend of traditional sectors, such as health care, industrials and consumer staples, maintain their strength. Meanwhile, stocks in new segments, such as artificial intelligence (AI), are emerging with promising prospects. Today, we examine three must-own stocks for the ride ahead in June and the rest of 2024.
AstraZeneca (AZN)
We start our discussion of must-own stocks with the U.K.-based biopharma giant AstraZeneca (NASDAQ:AZN). It has a diverse pipeline that includes oncology, cardiovascular, respiratory and other therapeutic areas. AstraZeneca boasts an impressive portfolio of over 180 projects, including 19 new molecular entities in its late-stage pipeline.
For the first quarter of 2024, AstraZeneca’s total revenue grew 19% year-over-year (YOY) to $12.7 billion, reflecting the sustained demand for its medications. Earnings per share (EPS) also witnessed a notable 21% increase from the previous year, reaching $1.41.
AstraZeneca’s strategic move to invest $1.5 billion in a Singapore facility for antibody-drug conjugates (ADCs) aims to enhance its oncology portfolio and spur future growth. Additionally, the acquisition of Fusion Pharmaceuticals, a company specializing in next-generation radioconjugates, underscores AstraZeneca’s commitment to revolutionizing cancer treatment. Management is looking to replace traditional therapies with more targeted approaches, ultimately improving outcomes for cancer patients.
Since January, AZN stock has surged nearly 20% and currently offers a 1.8% dividend yield. Yet, shares remain reasonably valued at 19 times forward earnings and 5.3 times sales. Wall Street remains optimistic, projecting a 12-month price target of around $85 for AZN stock, an upside potential of 5% from its current levels.
Caterpillar (CAT)
Next up on today’s list of must-own stocks is Caterpillar (NYSE:CAT). The leading manufacturer of construction and industrial equipment is renowned for its strategic investments in sustainable technologies. Wall Street also loves CAT stocks’ consistent dividend payouts.
The company’s recent earnings revealed sales and revenues of $15.8 billion, nearly flat YOY, as the lower sales volume was offset by favorable price realization. Operating profit margin improved to 22.3%, while adjusted EPS increased to $5.60 from $4.91 in the prior-year quarter. Caterpillar generated $2.1 billion in operating cash flow and allocated $5.1 billion for share repurchases and dividends.
Expanding beyond its core business, Caterpillar is venturing into electric and autonomous vehicles for construction. Earlier this year, CAT partnered with CRH (NYSE:CRH) to expedite the adoption of electric construction vehicles in North America. The agreement focuses on deploying Caterpillar’s battery-powered, 70 to 100-ton off-highway trucks and charging infrastructure at a CRH site.
So far in 2024, CAT stock has gained around 11%, while shares are trading at 15 times forward earnings and 2.5 times sales. Analysts maintain a 12-month price target of $340 for Caterpillar stock, with a potential 4% upside. Additionally, CAT stock offers a 1.6% dividend and has consistently paid higher annual dividends for 30 consecutive years, earning recognition in the S&P 500 Dividend Aristocrats Index.
Coca-Cola (KO)
We conclude today’s discussion of must-own stocks with Coca-Cola (NYSE:KO). With a diverse product range of drinks recognizable worldwide and over 60 consecutive years of dividend increases, the company stands out as a top stock pick on Wall Street.
In late April, Coca-Cola released first-quarter 2024 results, indicating resilience amid economic challenges and setting the stage for growth. Total revenues reached $11.3 billion, showing an 11% organic growth YOY. Adjusted EPS rose by 7% to $0.72.
In recent years, Coca-Cola’s growth has been fueled not only by innovation and market diversification but also by offering healthier options. With a strong global presence and expansion into emerging markets like Latin America and Asia, the company maintains steady revenue growth. Recent Nielsen data confirms Coca-Cola’s U.S. retail dominance, with 4.1% YOY sales growth, outperforming the total beverage group.
Year-to-date, KO stock has returned roughly 8%, coupled with a healthy dividend yield of 3%. The shares are trading at 22.7 times forward earnings and 6 times sales. Finally, Wall Street has a 12-month median price forecast of $68.00, signaling an upside potential of 6%.
On the date of publication, Tezcan Gecgil did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
