Investing

Merrill Lynch Out With 10 Top US Stock Ideas for Q4

Lee Jackson

General Dynamics

This company, like other major defense prime contractors, had a very solid year and makes the US 1 list. General Dynamics Corp. (NYSE: GD) is a worldwide aerospace and defense company, and it has over 96,000 employees worldwide. General Dynamics operates through four business groups: Aerospace, Combat Systems, Marine Systems and Information Systems and Technology. The U.S. government is its largest customer, which could continue to bode well if Congress does not change hands.

Investors are paid a 1.98% dividend. Merrill Lynch has a $170 price target, while the consensus estimate is $168.69. The stock closed at $153.55.

Home Depot

This company remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.

Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself (DIY), do-it-for-me (DIFM) and professional customers.

Home Depot investors receive a 2.15% dividend. Merrill Lynch has $158 price target. The consensus price objective is $150.55, and shares closed Tuesday at $128.20.

Eli Lilly

This top big pharmaceutical stock is also on the US 1 list. Eli Lilly and Co. (NYSE: LLY) is a global health care company with numerous core products in a number of primary-care pharmaceutical markets. The company generates revenues from its pharmaceutical product and animal health segments.

The product portfolio includes Zyprexa (for schizophrenia and bipolar disorder), Gemzar (pancreatic cancer), Evista (osteoporosis), Cymbalta (depression), Cialis (erectile dysfunction), Strattera (attention deficit hyperactivity disorder), Erbitux (cancer) and Alimta (chemotherapy). Eli Lilly also has a strong presence in the diabetes market.

Shareholders are paid a 2.52% dividend. The Merrill Lynch price target is $108, and the consensus target is $97.80. Shares closed Tuesday at $81.11.

Under Armour

This apparel leader could have solid upside for investors. Under Armour Inc. (NYSE: UA) bills itself as the originator of performance footwear, apparel and equipment that has revolutionized how athletes across the world dress.

Designed to make all athletes better, the brand’s innovative products are sold worldwide to athletes at all levels. The Under Armour Connected Fitness platform powers the world’s largest digital health and fitness community through a suite of applications: UA Record, MapMyFitness, Endomondo and MyFitnessPal.

The Merrill Lynch price target is $54, and the consensus target is $53.62. Shares closed at $38.63.

Zoetis

This company rounds out the top long ideas for the quarter. Zoetis Inc. (NYSE: ZTS) engages in the discovery, development, manufacture and commercialization of animal health medicines and vaccines for livestock and companion animals in the United States and internationally.

The company offers anti-infectives that prevent, kill or slow the growth of bacteria, fungi, or protozoa; vaccines, which are biological preparations to prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response; and parasiticides that prevent or eliminate external and internal parasites, such as fleas, ticks and worms.

Shareholders receive a 0.75% dividend. Merrill Lynch has a $60 price target. The consensus target is $54.92, and shares closed Tuesday at $38.49.

The ideas that are listed as Underperform are Lululemon Athletica Inc. (NASDAQ: LULU) and Mosaic Co. (NYSE: MOS).

Given that many of these top picks reside on its US 1 list, Merrill Lynch is putting out some of the firm’s highest conviction stock ideas for the fourth quarter. All are solid ideas for the short and long term.