Merrill Lynch Out With 11 Top Stock Picks for 2018

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Northrop Grumman

This company was ranked as one of the top five defense contractors by sales last year. Northrop Grumman Corp. (NYSE: NOC) provides innovative systems, products and solutions in unmanned systems, cyber, C4ISR and logistics and modernization to government and commercial customers worldwide.

The Aerospace Systems segment designs, develops, integrates and produces manned aircraft, unmanned systems, spacecraft, high-energy laser systems, microelectronics and other systems and subsystems. The Information Systems segment offers advanced solutions for Department of Defense, national intelligence and federal civilian, state, international and commercial customers.

Wall Street applauded the company’s recent $7.8 billion purchase of Orbital ATK, which will expand its space and missile businesses just as the United States steps up efforts to defend against a possible strike by North Korea and threats in the Middle East.

Shareholders receive a 1.31% dividend. The $350 Merrill Lynch price target is above the consensus target of $324,13. Shares were trading on Friday’s close at $299.63.

Priceline

This internet travel leader gapped down big in early November and is offering a much better price point. Priceline Group Inc. (NASDAQ: PCLN) is an online travel business offering price disclosed and opaque airline tickets, hotel rooms, rental cars, vacation packages and cruises. It generates over 85% of gross profit from its international brands. Priceline operates Priceline.com, Booking.com, Kayak.com, Agoda.com, Rentalcars.com and OpenTable.

The travel giant is seen by many as an “open-ended” growth story. Many on Wall Street continue to see comparisons easing for international bookings and margins improving in 2018.

The Merrill Lynch price objective is $1,890, but the posted consensus target is $1,996.38. Shares were changing hands at $1735.30 and the week came to a close.

Texas Instruments

This old-school chip tech company has come back into favor big-time. Texas Instruments Inc. (NASDAQ: TXN) is a broad-based supplier of semiconductor components, ranging from digital signal processors to high-performance analog components to digital light-processing technology and calculators. Some 65% of Texas Instruments sales are exposed to the well-diversified, business-to-business industrial, automotive, communications infrastructure and enterprise markets.

The company increased its quarterly dividend earlier this year by 32%. The increase reflects its continued strength in free cash flow generation and its commitment to return excess cash to shareholders.

Shareholders are paid a 2.57% dividend. Merrill Lynch has a $115 price objective, and the consensus target price is $99.47. The stock was last seen trading at $97.18.

Xcel Energy

This is a top utility play for 2018. Xcel Energy Inc. (NYSE: XEL) is Midwest-based regulated utility company with operations in Minnesota, Michigan, North Dakota, South Dakota, Wisconsin, Colorado, Texas and New Mexico. It provides electric and gas distribution, as well as electric transmission services, to over 3.5 million customers.

Xcel shareholders receive a nice 2.8% dividend. Merrill Lynch has a $54 price target on the shares, but the consensus estimate is $61.12. The stock closed on Friday at $51.36.

Verizon

This top telecommunications company is a solid growth and income pick for 2018. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world. Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide.

Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

Verizon posted solid third-quarter results. It added 274,000 postpaid phone customers in the quarter, which was more than expected. Wireless service revenue inflected positive quarter over quarter for the first time in three years. The stock remains a safe and solid growth and income play.

Investors are paid an outstanding 4.6% dividend. Merrill Lynch raised its price target to $55 from $52. The consensus target is $50.61, which is under Friday’s closing price of $51.25.

Walmart

The giant retailer posted huge quarterly results and is favorite pick for the holidays and 2018. Wal-Mart Stores Inc. (NYSE: WMT) is the world’s largest retailer, operating retail stores in various formats, including Sam’s Club, in the United States as well as a growing e-commerce business (including Jet.com). Internationally Walmart also operates locations in Argentina, Brazil, Canada, China, Japan, Mexico and the United Kingdom.

Each week, nearly 260 million customers and members visit the company’s 11,535 stores under 72 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2016 revenue of $482.1 billion, Walmart employs approximately 2.2 million associates worldwide.

Shareholders receive a 2.09% dividend. The Merrill Lynch price target is $120. The consensus target is $100.47. Shares most recently traded at $97.35.

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There you have it, 11 top stocks to Buy from the analysts at Merrill Lynch for 2018. They represent a wide group of sectors, and all hold solid prospects for growth. Given the big run in many of these companies, investors may want to buy partial positions, and see if the new year doesn’t bring a chance to buy shares at lower levels.