In this article, we take a look at 15 best stocks under $100. If you want to see more best stocks under $100, go directly to 5 Best Stocks Under $100.
Stocks are very uncertain in the short term as pretty much anything can happen. Earnings can be better than expected or they can be worse than expected. Individual news events can also be better than expected or worse than expected.
Currently, the market is pretty uncertain.
On March 7, one news event negatively affected the market with the S&P 500 declining by 1.53% to below 4000. On March 7, Federal Reserve Chairman Jerome Powell said, "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."
As a result, the peak level of interest rates could be higher than previously expected. If interest rates rise too much, the economy, while currently expanding, could slow or even contract.
If the economy slows substantially enough, overall corporate earnings could decline. If earnings decline too much, there could be more of a headwind for the overall stock market.
While the short term is uncertain, the odds are still good that in the long term many blue chip companies with substantial competitive advantages can generate fairly decent returns.
Many blue chip companies are profitable and return excess capital through dividends. For those of you interested, check out 14 Best American Dividend Stocks to Buy Now.
Many blue chip companies that are profitable also buy back stock as another way of returning capital back to shareholders. If they buy back more stock than they issue and their earnings either stays the same or increases, the buybacks will help their EPS growth.
Owning one blue chip is not a high probability way of benefiting from market growth in the long term however. Management of blue chips could make a bad acquisition for instance, or they might position their company incorrectly in an important field. As a result, the overall return of an individual blue chip might not do as well in the long term even though the company has numerous competitive advantages.
One potential way to avoid that is to have a well diversified portfolio of leading blue chip stocks across many different sectors and holding for the long term.
Photo by Matthew Henry on Unsplash
Methodology
For our list of 15 Best Stocks Under $100, we selected 15 blue chip stocks with competitive advantages that had stock prices under $100 as of the close of March 7, 2023.
We then ranked each stock based on the number of hedge funds in our database of 943 funds that held shares of the same stock at the end of Q4.
For those of you interested, check out 12 Best Blue Chip Stocks To Buy Today.
15. Church & Dwight Co., Inc. (NYSE:CHD)
Number of Hedge Fund Holders: 36
Church & Dwight Co., Inc. (NYSE:CHD) is a leading consumer staple that makes household, personal care, and specialty products. Given the high inflation, Church & Dwight Co., Inc. (NYSE:CHD)'s financial results haven't done as well as some had expected in 2022 as some consumers have resorted to buying cheaper alternatives. In terms of the last quarter, the company reported adjusted EPS of $0.62 for Q4 on sales of $1.44 billion versus the consensus of $0.60 on revenue of $1.4 billion. For FY23, Church & Dwight Co., Inc. (NYSE:CHD) sees adjusted EPS growth of between 0% and 4%.
14. Truist Financial Corporation (NYSE:TFC)
Number of Hedge Fund Holders: 44
Truist Financial Corporation (NYSE:TFC) is one of the leading regional banks in the United States whose stock has declined given the potential for weaker economic conditions as a result of the Federal Reserve's interest rate increases. As a result, the stock is trading for a forward P/E ratio of 8.55 as of March 8, which is a fairly attractive valuation for a leading regional bank if it can achieve the expected earnings.
Truist Financial Corporation (NYSE:TFC) has also benefited from the interest rate increases with high net interest margin. For Q4, the company's net interest margin was 3.25%, up 13 basis points from Q3 2022 and up 49 basis points from Q4 2021.
Of the 943 hedge funds in our database, 44 owned shares ofTruist Financial Corporation (NYSE:TFC) at the end of Q4, ranking the stock #14 on our list of 15 Best Stocks Under $100.
13. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 55
Morgan Stanley (NYSE:MS) is a leading investment bank on Wall Street that has managed to remain pretty profitable despite the difficult market environment given weaker broader markets and higher interest rates. With weaker broader markets, there is generally less appetite for capital markets services. Although the company's net income declined to $11.029 billion for FY2022 from $15.034 billion in FY 2021, Morgan Stanley (NYSE:MS) has nevertheless has been able to repurchase $10 billion worth of shares in FY2022 and also pay an annual dividend of $3.10 per share. For the year, Morgan Stanley (NYSE:MS)'s wealth management business was a bright spot as it achieved record sales of $24.4 billion and pre-tax income of $6.6 billion.
12. The Bank of New York Mellon Corporation (NYSE:BK)
Number of Hedge Fund Holders: 55
The Bank of New York Mellon Corporation (NYSE:BK) is a leading investment management company that has also faced headwinds given the weaker broader markets. For Q4, The Bank of New York Mellon Corporation (NYSE:BK) earned an adjusted EPS of $1.30 on sales of $3.9 billion versus the consensus of $0.83 on revenue of $4.21 billion. At the end of Q4, The Bank of New York Mellon Corporation (NYSE:BK)'s AUM was $1.8 trillion, its CET1 ratio was 11.2%, and tangible book value per share was $23.11. If the broader markets recover in the long term, there is potential for more long term EPS growth for The Bank of New York Mellon Corporation (NYSE:BK).
11. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 58
U.S. Bancorp (NYSE:USB) is a leading regional bank that has benefited from higher interest rates. For full year 2022, the bank had a net interest margin of 2.72%, versus a net interest margin of 2.49% for 2021. For full year 2022, U.S. Bancorp (NYSE:USB) CEO Andy Cecere said, "Full year results, as adjusted, were highlighted by strong pre-provision earnings growth, driven by solid net interest income, wider net interest margin, and positive operating leverage over 230 basis points. On December 1 we completed the acquisition of MUFG Union Bank, which meaningfully increased our market share in California by adding one million consumer, 700 commercial, and 190,000 business banking customers." In the long term, U.S. Bancorp (NYSE:USB) has potential to achieve even more scale and EPS than it does currently.
10. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 61
NextEra Energy, Inc. (NYSE:NEE) is one of the largest utilities in the United States that has a substantial renewable energy portfolio that arguably makes it a potentially socially responsible investment in addition to being a candidate for decent long term returns. In terms of renewable energy, NextEra Energy, Inc. (NYSE:NEE) operates over 16,000 MW of emissions free wind energy with plans to further expand its wind capacity. In total the company has around 28,000 MW of renewable generation in operation and 18,000 MW of renewable generation under development. NextEra Energy, Inc. (NYSE:NEE) also has 4,500 megawatts of battery storage operating & under development.
9. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 61
Colgate-Palmolive Company (NYSE:CL) is a consumer staple that ranks #9 on our list of 15 Best Stocks Under $100 given 61 hedge funds in our database owned shares of the company at the end of Q4. Although inflation is still a headwind, Colgate-Palmolive Company (NYSE:CL) said in January that it sees 2023 net sales growth of 2% to 5% including the benefit of its acquisitions of its pet food businesses and a low single digit negative impact from foreign exchange. If it does a good job branding,Colgate-Palmolive Company (NYSE:CL) has more long term sales and EPS growth.
8. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 65
Oracle Corporation (NYSE:ORCL) is an enterprise software company that has long term growth potential given cloud and AI growth in addition to continued enterprise software demand growth. In terms of EPS estimates, analysts estimate Oracle Corporation (NYSE:ORCL) will earn $4.90 per share for FY2023, $5.57 per share for FY2024, and $6.39 per share for FY2025. By comparison, Oracle Corporation (NYSE:ORCL) earned $4.75 per share in FY2022. For those of you interested check out 10 High Growth AI Stocks to Buy.
7. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 74
The Charles Schwab Corporation (NYSE:SCHW) is a leading investment services firm with $7.48 trillion in client assets. For full year 2022, The Charles Schwab Corporation (NYSE:SCHW) net revenues rose 12% year over year to $20.762 billion and its adjusted EPS increased 20% year over year to $3.90 per share despite the weaker broader markets. AlthoughThe Charles Schwab Corporation (NYSE:SCHW) has potential downside in the near term if there is an economic slowdown, the company has long term growth potential and has a forward P/E ratio of 13.91 as of 3/8.
6. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 81
Citigroup Inc. (NYSE:C) is one of the big 4 American banks with substantial scale. Early in March, Bloomberg reported that Citigroup Inc. (NYSE:C) is cutting hundreds of jobs with the investment banking division among those that are affected. Among the big four banks, Citigroup Inc. (NYSE:C) has a lower valuation in terms of price to book ratio as the market isn't as optimistic as it is on the other big four major American banks. Nevertheless, Citigroup Inc. (NYSE:C) has a dividend yield of 4.03% as of 3/8 and 81 hedge funds in our database owned shares of Citigroup Inc. (NYSE:C) at the end of Q4, ranking the stock #6 on our list of 15 Best Stocks Under $100.
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Disclosure: None. 15 Best Stocks Under $100 is originally published on Insider Monkey.
