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Most investments involve uncertainty. You can also put your money in CDs or high-yield savings accounts to minimize risk, but these accounts don't offer the same returns as stocks. Stock prices can fall, but for long-term investors, there is potential for big gains.
Index funds and ETFs can simplify the investment process. Although these funds don't require much effort, some investors may want to build a portfolio that can achieve significant returns while matching their risk tolerance. Investors looking for stability and reduced risk may want to consider these promising dividend stocks.
Microsoft (MSFT)
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microsoft (NASDAQ:MSFT) has become a diversified company that leverages numerous growth avenues. Although the yield is not high, the combination of good growth rates and large number of segments could lead to continued outperformance. Business Software, Xbox, LinkedIn, Microsoft Azure Cloud, Bing, Artificial Intelligence (A.I.) are part of the company's opportunities.
Azure is currently the most important revenue source, accounting for more than half of the company's total revenue in Q2 2024. Cloud revenue grew 24% year over year (YoY comparison) Meanwhile, the company's overall revenue increased 18% year over year. Additionally, MSFT generated revenue of $62 billion and net income of $21.9 billion in the same quarter. That means your net profit margin is 35%.
Analysts are not satisfied with the stock and think it has 17% upside potential from current levels. The stock has a strong buy rating and its high price target of $550 per share suggests an upside of 35%. Microsoft lived up to the analyst's optimism, with him gaining 10% since the beginning of the year (YTD) Obtained. Over the past five years, the stock has soared 214% of his.
Walmart (WMT)
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many people pay attention walmart (New York Stock Exchange:WMT) When you want to save money. When the cost of living rises and the economy becomes unstable, people want to protect their wallets.
Walmart has built a reputation as an affordable retailer, but in good times its stock can outperform the broader market.Over the past five years, the stock price has increased by 75%, which is S&P500. Additionally, Walmart's year-to-date gain of 12% is higher than the well-known index.
Walmart ended the fourth quarter of 2024 with 5.7% year-over-year revenue growth. Advertising and e-commerce continue to strengthen the company. These two segments could make Walmart more attractive to long-term investors. Recently, Walmart acquired Vizio to strengthen its advertising division.
The company's stock has a dividend yield of 1.40%, and it recently promised a 9% increase in dividends. This is Walmart's largest dividend increase in more than a decade. Walmart currently has a P/E ratio of 31x.
American Express (AXP)
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american express (New York Stock Exchange:AXP) provides stability in any business cycle. Certain products and services may become unpopular, but people will continue to use credit and debit cards. These cards are more convenient than cash and allow consumers to earn rewards and cash back on every purchase.
Investors can choose from multiple credit card giants. However, American Express has the lowest P/E and its profit margin is increasing rapidly. The company has a P/E ratio of 20x and has achieved an exceptional return of 104% over the past five years. He's also off to a great start with a 27% increase year-to-date.
American Express achieved 11% year-over-year revenue growth and 34% year-over-year net income growth in the first quarter of 2024. The company expects full-year revenue growth to be between 9% and 11%. Most of the company's newest cardholders are his Gen Z or Millennials. This trend shows that the company has the ability to attract younger generations.
On the date of publication, Marc Guberti held a long position in MSFT. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
Marc Guberti is a freelance financial writer for InvestorPlace.com and hosts the Breakthrough Success podcast. He has written for several publications including US News & World Report, Benzinga, and Joy Wallet.
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