The optimization of investing strategies is contingent upon the identification of top stocks to buy at a time characterized by economic instability and swift technical improvements. Knowing which stocks to buy is crucial as we enter the second half 2024. These best companies are excellent choices for big returns and risk reduction since they frequently have good financial stability, market leadership, growth potential, strategic vision and consistent dividends.
Moreover, these businesses frequently do better across the board regarding portfolio performance because they are more adept at navigating economic and market volatility. The necessity for a strategic approach to stock selection is reflected in the present investing landscape, which is impacted by high rates, the post-pandemic recovery, AI developments, inflation and changing consumer patterns. One may create a solid portfolio concentrating on businesses that excel in these areas.
Overall, this protects against inflation and downturns peculiar to a given industry while ensuring stability and growth in the higher-for-longer macro environment.
Top Stock to Buy No. 1: Horace Mann (HMN)
Horace Mann (NYSE:HMN) leads in insurance and financial services for educators and their families. The property and casualty segment profit for Q1 2024 was $11 million, up $22 million from Q1 2023. Losses, both catastrophic and non-catastrophic, were less than in Q1 2023.
The property and casualty insurer’s combined ratio rose by 13 points year-over-year (YoY) to 99.9% in the first quarter. The combined ratio measures the percentage of premiums an insurer has to pay out in claims and expenses. The improvement from more than 112.9% to 99.9% is noteworthy and suggests improved risk management and underwriting.
Further, effective pricing tactics and client loyalty are reflected by the expected premium increase of 40% for cars and 50% for property from 2022 to 2024. It also exhibited consistent policyholder retention rates. Maintaining profitability in a competitive market requires these improvements.
The notable California market has authorized rate hikes that should considerably raise the company’s prospective income. Retention rates that remain stable despite increasing premiums point to a solid value offer and client loyalty.
Overall, Horace Mann’s position on the list of top stocks to buy is based on its increased profitability measures for the property and casualty segment.
Columbia Banking (COLB)
Columbia Banking (NASDAQ:COLB) is a regional bank that leads in loans, deposits and investment products. In Q1 2024, loans increased by $200 million and deposits rose by $100 million. These results demonstrate the bank’s fundamental capacity to expand its asset base efficiently.
Further, the bank’s sharp asset-liability management reflects its ability to maintain a net interest margin of 3.52% within the projected range despite increased deposit costs and reduced revenue from investment securities due to slower prepayment activity. The bank made proactive efforts to stabilize and enhance its profitability margins, which resulted in a net interest margin improvement of 3.55% in March.
Moreover, the small business campaign reflects the bank’s successful marketing and client acquisition techniques. It generated $225 million in deposits in Q1 and an additional $75 million in the second. To sum up, Columbia Banking is among the top stocks to buy because of its strong asset growth, stable net interest margins and sharp small-company acquisition strategies.
Top Stock to Buy No. 3: Heidrick & Struggles (HSII)
Heidrick & Struggles (NASDAQ:HSII) is a global executive search and consulting firm specializing in leadership advisory. Despite the expansion, the company continued to be very profitable. In Q1 2024, adjusted EBITDA was $25.9 million, and the 9.8% adjusted EBITDA margin shows a solid operational edge. Moreover, the company’s profitability was stable despite slightly declining adjusted EBITDA margin from 10.7% in Q1 2023.
Additionally, the most robust business unit is executive search. This segment has an adjusted EBITDA margin of 24%. Heidrick & Struggles has relied heavily on acquisitions as part of its expansion strategy. Atreus and Businessfourzero’s acquisitions helped boost revenue in the first quarter. The favorable effect of the Atreus purchase was principally responsible for the revenue boost of on-demand talent.
To sum up, solid adjusted EBITDA margins, smart acquisitions and great profitability are the cornerstones of Heidrick & Struggles’ standing as one of the top stocks to buy.
Despegar (DESP)
Despegar (NYSE:DESP) leads an online travel business in Latin America. At $173.7 million, the company’s revenues increased by 9% YoY. This indicates strong top-line growth. The company had a high take rate of 13.4%, demonstrating its focus on profitable expansion. Additionally, Despegar’s adjusted EBITDA jumped to $39 million, a massive 126% YoY rise.
Moreover, growth has been aided by Despegar’s deliberate attention to important markets like Mexico and Brazil. It also concentrates on niche markets like business-to-business and white-label alliances. The company’s gross bookings increased considerably YoY in Brazil (27%) and Mexico (26%). The company is securing its position as the market leader in both countries. Furthermore, Despegar’s white label and B2B divisions saw remarkable YoY growth rates of 11% and 47%, respectively.
In short, Despegar is included among the top stocks to buy due to its stable top-line growth, rising adjusted EBITDA margins and strategic focus on high-margin sectors.
Top Stock to Buy No. 5: Conagra Brands (CAG)
Conagra Brands (NYSE:CAG) operates with a diverse portfolio of grocery and snack products. With a 4.2% increase in price mix and a 0.8% fall in volume, the grocery & snacks division saw a 3.4% gain in net sales. Segments operating profit climbed by 16.7% to $299 million.
Meanwhile, Conagra’s adjusted operating profit increased by 16.5% to $300 million. Indeed, higher organic net sales, productivity increases and decreased advertising and promotional costs contributed here. Gains in market share were facilitated by strategic expenditures in brand support, especially for items like pudding and chili.
Notably, due to positive foreign currency effects and a 1% boost in organic net sales, Conagra’s international segment’s net sales increased by 4.6% to $272 million. Adjusted operating profit rose 16.4% to $43 million, while operational profit climbed 13.9% to $42 million. Notwithstanding inflation and rising selling and operating costs, Mexico’s improved performance and higher efficiency were the main drivers of these successes.
To conclude, Conagra Brands’ ranking among the top stocks to buy was backed by strong growth in the international and grocery & snacks segments.
AT&T (T)
AT&T (NYSE:T) is a telecommunications giant that provides wireless, broadband and entertainment services. Since Q1 2023, the company has rapidly increased the number of sites on its fiber network. crossing 2.4 million additional locations by Q1 2024 and bringing the total to over 27 million consumer and commercial locations. This expansion aims to increase the company’s market share in broadband.
Further, the fastest-growing sector for AT&T is the fiber segment. The company added almost 1.1 million fiber consumer subscribers in the last year, bringing the total number of consumers to almost 8.6 million. With 252,000 AT&T fiber net additions in Q1 alone, it was the 17th straight quarter with more than 200,000 net additions.
AT&T’s fiber services have been growing rapidly and offering a competitive advantage in terms of price and value. The average revenue per user (ARPU) for AT&T’s fiber services was $68.61, up more than 4% YoY. The first ARPU for new clients remains higher than $70, indicating a competitive edge in price and value. With aggressive growth in fiber, solid broadband subscriber acquisitions and competitive pricing in fiber services, AT&T is positioned as one of the top stocks to consider for investment.
Verizon (VZ)
Verizon (NYSE:VZ) leads telecommunications with wireless and broadband services. A fundamental part of this is its capacity to sustain and boost adjusted EBITDA. The company derived a YoY boost of 1.4% in Q1 2024 with adjusted EBITDA of $12.1 billion. Despite ongoing network and service development investment, this solid increase represents the company’s sharp cost management and operational performance.
Further, the increase in adjusted EBITDA is another indication of Verizon’s ability to boost profitability through calculated efforts. In this sense, the company’s cost-efficiency initiatives are vital. For Verizon’s consumer segment, EBITDA margin improved from 41.5% to 42.6% while operating income margin climbed from 28.6% in Q1 2023 to 29.4% in Q1 2024.
To conclude, the company’s fundamental capacity to invest in network development and generate sustainable profit growth is supported by its consistent boost in adjusted EBITDA and effective cost control.
As of this writing, Yiannis Zourmpanos held long positions in HMN, COLB, HSII, DESP, CAG, T and VZ. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
