3 of the Best Stocks to Buy this Earnings Season

November 9, 2021
By The Investing Insider Staff

3Q earnings season has already kicked off. And expectations are for it to be a big one. 

Analysts at S&P Global Market Intelligence are projecting aggregate earnings per share on the S&P 500 to grow by a whopping 24.5%.

Economically sensitive sectors, such as financials, hospitality, real estate, energy, etc., are expected to report the largest rebound since the downfall from March 2020.

And in light of these expectations, we’ve cherry-picked some of the best stocks for you to begin your investment journey or add to your stock portfolios for building long-term wealth.

3 of the best stocks to buy this earnings season are:

Chevron (CVX:NYSE), Shopify (SHOP:NYSE), and Visa(V:NYSE)

Chevron (CVX:NYSE)

While headlines around the world are ringing an alarming situation that will require a substantial investment towards developing renewable energy sources and so-called bridge fuels, one of the largest oil producers in the world could end up being a leader and performing strong for decades to come.

Chevron is a vertically integrated petroleum operating company that is well-positioned to excel in tomorrow’s environment and generate a high return on capital. Fundamentally speaking, Chevron is a high dividend-yield stock with improving margins and conservative valuations that attract many investors.

The above chart compares the total returns (%) generated by investing in Chevron stock from May 2021 till Oct 2021 and SPDR S&P 500 ETF – which is the world’s largest exchange-traded fund that tracks the S&P 500 stock market index.

Chevron stock has outperformed the S&P 500 ETF in a period of six months by delivering a 9.62% return, 50% higher than the 6.25% return generated by S&P 500 ETF.

Going forward, Chevron could be well-positioned to capitalize on future opportunities thanks to its strong project pipeline. 

Its recent takeover of Noble Energy has expanded its footprint in the lucrative, low-cost Permian Basin and the DJ Basin, along with the addition of cash-generating offshore assets in Israel. In fact, this particular deal will help Chevron in annual cost savings of $300 million.

For these reasons and more, Chevron makes the list as one of the best stocks to buy this earning season.

Shopify (SHOP:NYSE)

Even with offline shopping reclaiming some of its share of retail from eCommerce, Shopify continues to display strong growth.

Shopify managed to double gross merchandise value (GMV) from $200 billion to over $400 billion in a matter of just 16 months.

Such explosive growth has propelled the company to become the second largest ecommerce retailer in the US behind Amazon.

Shopify constituted 8.6% of the U.S. Retail Ecommerce Sales in 2020. According to the company’s management, their recent partnership with Facebook, Instagram, and TikTok is contributing well towards increasing the share of social GMV, which is gaining at a steady pace QoQ.

As per the latest Q3 filings of the company, merchant solutions revenue has scaled up 51% to $787.5 million, while subscription solutions revenue rose around 37% to $336.2 million with the new addition of 48,000 merchant customers during the third quarter.

Merchants can now transition seamlessly between online and offline selling to give their customers an omnichannel shopping experience that’s simple and convenient by using Shopify’s all-new point-of-sale software.

The GMV has significantly grown in this quarter through its point-of-sale software, and its launch in Germany & New Zealand has contributed to this growing momentum.

In light of these positives, Shopify could take a place in your portfolio as one of the best stocks to buy right now.

Visa (V:NYSE)

The world’s largest global electronic payments company reported a robust Q4 performance with net income of $3.6 billion.

The company’s net revenues saw an uptick of 29%, and stood at $6.6 billion owing to a 46% rise in international transactions revenue, followed by a 21% increase in the total processed transactions amounting to $45.3 billion.

Visa’s “moat” lies in its scale of operations and scalability in terms of its undisputed dominance of the payment network.

The company’s business operations are spread across more than 200 nationalities around the world, with 3.6 billion debit cards, credit cards, and prepaid cards in circulation globally. A mind-boggling $12.5 trillion worth of transactions were handled last year.

This kind of dominance is unlikely to be changed in the future.

Furthermore, revenue generated by the data processing segment rose over 20%, amounting to $3.4 billion and international transactions revenue jumped 41% compared to the previous year resulting in an amount equivalent to $1.9 billion.

Visa stock remains one of the best stocks to buy this earnings season as the transaction volumes have witnessed significant recovery in the first nine months of this year, and growth mainly came in this quarter, driven majorly due to an increase in payments volume, cross-border volume, and processed transactions.


-Investing Insider Staff
This article is informational purposes only and is not investment advice.  See full disclaimer here
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