Merrill Lynch Growth Portfolio Stocks Crushing the S&P 500: 5 to Buy Now

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While Lowe’s doesn’t have quite the store coverage that Home Depot does, with only 31% of the stores in the disaster-prone states, two recent acquisitions by the company, Alacrity and Maintenance Supply Headquarters, could help it capture continued post-hurricane demand.

Lowe’s investors are paid a 1.72% dividend. Merrill Lynch has a $123 price objective, while the consensus target price was last seen at $110.33. The shares closed on Wednesday at $95.34 apiece.


This top homebuilder has a wide product portfolio. PulteGroup Inc. (NYSE: PHM) is one of the largest public homebuilders in the United States, delivering over 21,000 homes in 2017. The company is also well-positioned in approximately 50 markets in 26 states, targeting the first-time, move-up and active adult buyer groups.

PulteGroup primarily builds single-family detached homes, although it also constructs townhouses, condominiums and duplexes. The company owns a captive financial services business that provides mortgage financing, title, insurance and closing services.

The analysts were positive on fourth-quarter results and said why:

Following a solid fourth quarter, we slightly lower our 2018e earnings and to reflect a higher expected tax rate, However, we raise 2019e EPS from $3.70 to $3.85 given the company’s continued execution, while introducing a 2020e of $4.35. We view Pulte’s 2018 financial outlook as conservative, particularly deliveries, and expect upside as the year continues.

Pulte Homes investors are paid a 1.23% dividend. The $42 Merrill Lynch price objective compares with the posted consensus price target of $35.94. The shares closed most recently at $29.34.

Western Digital

This long-time innovator in the storage industry is a leader in the total addressable HDD market. Western Digital Corp. (NASDAQ: WDC) is an industry-leading developer and manufacturer of storage solutions that help to create, manage, experience and preserve digital content.

The company is responding to changing market needs by providing a full portfolio of compelling, high-quality storage products with effective technology deployment, high efficiency, flexibility and speed. Its products are marketed under the HGST and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure providers and consumers.

Western Digital stock traded down after earnings despite being above Wall Street earnings expectations for the fourth quarter and fiscal 2018, as investors were concerned about peak margins. The analysts feel that NAND supply-demand will not come into balance until mid-calendar 2018, creating forward upside potential.

In addition, the long-drawn dispute with Toshiba finally was put to rest, and the analysts said this:

The global settlement is positive as it removes uncertainty of NAND supply for Western Digital and the company gets to protect its intellectual property. The company positively preannounced the December quarter (revenue high end, margins came in better, offset somewhat by higher operating expense). Visibility has improved and management expects the flash supply/demand environment to remain healthy throughout 2018.

Shareholders are paid a 2.33% dividend. The Merrill Lynch analysts have a $120 price target. The consensus target is $113.58, and the stock closed trading on Wednesday at $85.67 a share.

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These five top stocks are reasonable compared to some of the other high-flying ones, and they would make good additions to growth accounts looking to add more equity exposure for the rest of 2018.