Why Merrill Lynch Value 10 Stocks May Be the Best Bets for 2020


This old-school leader in semiconductors continues to work hard to focus more on Internet of Things and data center cloud spending, and it is one of the top picks at Merrill Lynch for 2020. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.

The company’s platforms are used in various computing applications, comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.

Intel offers investors a solid 2.25% dividend, and the shares trade at 13.4 times trailing 12-month earnings. The $70 Merrill Lynch price target compares with a $54.45 consensus price objective and the most recent closing price of $56.02 per share.

Marathon Petroleum

This is a solid way to play an energy sector that has lagged dramatically in 2019. Marathon Petroleum Corp. (NYSE: MPC), one of the largest independent petroleum refining and marketing companies in the United States, is based in Findlay, Ohio.

The company operates approximately 2,750 retail sites under the Marathon and Speedway brands. In addition, it operates a logistics network of pipelines, barges, trucks and terminals that store and transport crude and products.

The company bought rival refining giant Andeavor last year for $23.3 billion in the biggest-ever deal for an oil refiner, creating the largest independent fuel maker in the United States. It was one of the biggest mergers in 2018. Following the deal, Marathon became the largest operator of refining capacity in the United States, and management believes the company can achieve the $1 billion in synergies that it suggests.

Marathon Petroleum shareholders receive a 3.53% dividend, while the shares trade at 12.9 times trailing earnings. The Merrill Lynch price target is a whopping $95. The posted consensus target is just $78.57, and the shares closed at $60.03 on Wednesday.

United Rentals

This stock has rallied smartly but still has solid upside potential, and it is also on the Merrill Lynch US 1 list. United Rentals Inc. (NYSE: URI) is the largest equipment rental company in the world. The company has an integrated network of 876 rental locations in 49 states and 10 Canadian provinces.

With approximately 12,200 employees, the company serves construction and industrial customers, utilities, municipalities, homeowners and others. It offers for rent approximately 3,100 classes of equipment for rent.

Trading at 10.5 times trailing 12-month earnings, it remains very cheap. The Merrill Lynch price target is $175. The consensus target was last seen at $180.29, and the stock closed trading most recently at $150.53 per share.

While the rotation to value stocks has been a long-time coming, the pricey stock market is making the turn almost inevitable. Toss in the fact that we could have a major early 2020 sell-off, making these reasonably priced companies even a better choice for investors now.

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