2018 Laggards May Be Big 2019 Winners: 5 Stocks to Buy Now

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KeyCorp

This top midcap bank makes good sense for the rest of the year and into 2019. KeyCorp (NYSE: KEY) operates as the bank holding company for KeyBank National Association, which provides deposit, lending, cash management and investment services to individuals, small and medium-sized businesses.

The company also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets banner.

The top managers are attracted to the larger regional banks, as valuations look very reasonable and cost-saving plans are helping to make forward estimates look very achievable. With overall credit remaining solid, earnings and loan deposit and fee growth all are positive metrics for the bank.

KeyCorp investors receive a solid 3.79% dividend. The $23 Jefferies price target is just above the $22.17 consensus target. The shares closed on Monday at $18.44.

Nucor

This top steel company could continue to do very well if the economy sees a continued strength next year and nonresidential construction grows. Nucor Corp. (NYSE: NUE) is one of North America’s largest steel producers, with almost 27 million tons of finished steel capacity at 23 mini-mills throughout the United States.

The company’s downstream steel products business includes rebar fabrication, steel joists/deck, cold finished bars, fasteners, building systems and wire mesh. Nucor also has 5 million tons of scrap processing capacity.

Nucor has always kept a very conservative balance sheet and is poised for slow but steady growth next year and beyond, especially if a huge infrastructure build-out becomes a reality.  In addition, global weather catastrophes have also helped continue to drive the need for steel products.

Nucor investors receive a very solid 2.56% dividend. The Jefferies price target is $80. The consensus target was last seen at $75.43, and the stock closed most recently at $61.19.

Williams Companies

This top energy stock was added to the Jefferies Franchise Pick list back in the summer. Williams Companies Inc. (NYSE: WMB) is now largely a pure-play domestic natural gas infrastructure company that recently completed the merger with its underlying master limited partnership, Williams Partners.

The company has a lower risk, fee-based business model with some volume sensitivity. Natural gas demand continues to be driven by LNG exports, power generation and industrial needs. In addition to steady demand growth, Marcellus production and associated gas in the Permian are expected to continue to be primary supply drivers.

Shareholders are paid a very sizable 5.41% dividend. Jefferies has set its price target at $34. The consensus target is $33, and the shares closed on Monday at $25.70.

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These five stocks have dramatically lagged this year but could be offering investors solid upside potential for the next six months and beyond. While the market is currently giddy over the potential for the trade disputes to be settled, it’s important to remember that if they fail in the negotiations, there could be a steep sell-off as a result.