I recently discussed the best $20 stocks to buy in April. Now I’m hunting for the best $50 stocks to buy this spring. Rather than select stocks under $50, I will look at all S&P 500 stocks trading within $5 of $50 as I write this. According to Finviz.com, there are 435 stocks over $40. From here, I can manually narrow down to the stocks between $45 and $55 in the index. My quick check counts 21 in this range. That should be enough to find the three best $50 stocks.
In early April, I selected three $50 stocks that would walk all over Donald Trump’s media stock. All three outperformed Trump Media & Technology Group (NASDAQ:DJT) in the past month. With the markets retreating, it will be challenging to pick near-term winners. However, I’m more concerned about providing readers with good long-term bets.
Here are my three choices for this spring and beyond.
General Motors (GM)
At the time of writing, General Motors (NYSE:GM) trades at $45.36, up nearly 2% over the past five days. GM stock has done well over the past week because of positive earnings news.
On April 23, it reported a 7.6% revenue increase for Q1 2024, to $43.01 billion, with a net income of $2.98 billion, 24.4% higher than a year ago. As a result of the strong start, it raised its 2024 guidance to $10.8 billion in net income at the midpoint of its outlook, $300 million higher than previously.
Analysts expected it to earn $2.12 a share; it beat that by 48 cents. Revenues beat the consensus by $600 million.
“In January, we outlined clear priorities for GM in 2024. They are to leverage the strength of our winning ICE portfolio, grow our EV business profitably, advance our software-defined vehicle capability, and relaunch Cruise safely while delivering strong margins and cash flows,” stated CEO Mary Barra in the company’s Q1 2024 Letter to Shareholders.
I’ve been critical of Barra’s pay in the past. However, she’s delivering outstanding results for shareholders.
Brown-Forman (BF-B)
Brown-Forman (NYSE:BF-B) trades at $47.30, down nearly 2% over the past five days. More importantly, over the past five years, it barely generated a positive return for its shareholders, generating a five-year annualized total return, which includes dividends, of less than 1%.
The reason for the underperformance is apparent: it’s not growing.
However, it’s important to note that this is a problem industrywide. Diageo (NYSE:DEO), one of the world’s largest alcohol beverage companies, has suffered under the same fate in recent times. In early March, Diageo reported Q3 2024 results that were less than flattering from a revenue perspective, with a 1% decline in sales to $1.07 billion, $60 million less than analyst expectations.
In comparison, Brown-Forman’s bottom line was much better, increasing by 185% to $285 million, or $0.60 a share, four cents higher than the consensus.
As part of its Q3 2024 report, CEO Lawson Whiting said that the company expects the U.S. spirits market to return to more normalized annual revenue growth of 4%-5%. It slowed over the past 12-18 months due to consumers reducing spending combined with heavier-than-normal inventories coming out of the pandemic.
I’ve always liked this company because of its family ownership. In May 2013, I recommended it and three other family-owned publicly traded businesses. Its total return from 2013 isn’t as good as the other three, but because of its correction since the beginning of 2021, it’s not nearly as impressive.
As the company said in its Investor Day presentation in March, it has four strategic priorities for its business through 2032: Grow the number of geographic markets it’s in, attract new and younger drinkers, grab market share in the super-premium category, and grow its flavored drinks and RTD (ready-to-drink) product lines.
Delta Air Lines (DAL)
Delta Air Lines (NYSE:DAL) trades at $52.62, up 4.2% over the past five days. Earlier in this spring, I recommended buying DAL stock as we enter the summer season. People will travel today, tomorrow, and every day thereafter.
As I wrote in my commentary, it projected a 2024 free cash flow of $3.5 billion, giving it a free cash flow yield of 6.7%, verging on value territory, despite its stock gaining 52% over the past year. Regarding management, they have top talent. CEO Ed Bastian isn’t just one of the best airline executives; he’s one of America’s best CEOs.
Interestingly, I didn’t realize until writing this that Alain Bellemare, former CEO of Canada’s Bombardier (OTCMKTS:BDRBF), was hired by Delta to be executive vice president in January 2021. He did a reasonably good job at Bombardier despite a challenging situation where it had to sell its C-Series aircraft to Airbus (OTCMKTS:EADSY) for the Canadian-made plane to survive and thrive as the A220.
Of all the U.S. airline stocks, Delta is my favorite.
On the date of publication, Will Ashworth did not have (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.
