Investing

5 Blue Chip Stocks to Buy Now With Huge Piles of Cash and Very Low Debt

Gilead Sciences

This company is trading a very reasonable 9.36 times estimated 2020 earnings and may have a coronavirus treatment. Gilead Sciences Inc. (NASDAQ: GILD) is a biopharmaceutical company that discovers, develops and commercializes therapies for the treatment of HIV/AIDS, liver disease, cancer and inflammation. The acquisition of Kite Pharmaceutical in 2017 allowed for entry into the CAR-T space, indicating a renewed focus in oncology.

The company’s products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost and Vitekta for the treatment of human immunodeficiency virus (HIV) infection in adults; and Harvoni, Sovaldi, Viread and Hepsera products for the treatment of liver disease.

The company’s remdesivir may prove to be a promising COVID-19 treatment, and the World Health Organization labeled it as “the most promising” antiviral during the early days of the outbreak. But its effectiveness won’t be known until a slate of clinical trials reads out, with the first expected from China in the coming weeks.

Investors receive a 3.75% dividend. Gilead Sciences stock closed most recently at $72.51, not far from the $74.50 consensus price target.

Intuit

This company hits all the metrics in the technology sector for accounting needs. Intuit Inc. (NASDAQ: INTU) is a provider of business and financial management solutions for small and medium-sized businesses, financial institutions, consumers and accounting professionals.

Products and services include TurboTax, QuickBooks, Quicken, small business financial management and payroll processing, personal finance and tax preparation and filing and online banking services through its Digital Insight acquisition. Intuit also offers products on a software as a service (SaaS) platform across all its business divisions.

Intuit has served small businesses and accountants with QuickBooks for more than 20 years. The company was an early innovator in cloud accounting when it first launched QuickBooks Online in 2001. QuickBooks Online has more than a million paying subscribers, cementing its market leadership as small businesses shift to the cloud.

Over 40% of small businesses are using either Quickbooks Online or Quickbooks Desktops, while 35% are using Excel or manual paper accounting. Top Wall Street analysts remain very positive on the shares, as they think Intuit’s revenue growth could still exceed the firm’s 10% to 11% guidance.

Investors receive a 0.97% dividend. The $285 consensus price objective on Intuit stock compares with the most recent close at $218.12 a share.

Lam Research

This remains one of the top chip equipment picks across Wall Street, and it was up big on the bullish report. Lam Research Corp. (NASDAQ: LRCX) designs, manufactures, markets, refurbishes and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers plasma etch products that remove materials from the wafer to create the features and patterns of a device.

Many Wall Street analysts have highlighted the company and its peers as having a significant equipment opportunity from the NAND evolution as well. Lam Research also appears well positioned to gain share in the wafer fab equipment market, driven by a strong focus on technology inflection spending over the next few years.

The dividend yield is 2.00%. The consensus price objective is $305.76, and Lam Research stock closed at $223.33 on Wednesday.

Again, these five top companies have large troves of cash and very little debt. These are metrics that are crucial for investors as we have entered a bear market, as too much debt can be a killer when liquidity shrivels up, which it surely did in early March. While not suitable perhaps for very conservative accounts, they all make sense for long-term growth investors with an eye on recovery down the road.