Investing

BofA Securities Adds 3 Blue Chip Leaders to US 1 List of Top Stocks to Buy

Small businesses and individuals having a hard time entering the digital economy are getting a boost from Mastercard as the need to receive funds electronically and make digital and contactless payments has been underscored by the COVID-19 pandemic.

The company has pledged to connect 1 billion people and 50 million small businesses to the digital economy by 2025. This commitment is an extension of its 2015 promise to bring 500 million people who don’t have ready digital access to financial products into the system.

The analysts said this when discussing fourth-quarter results:

Fourth quarter results were better than feared and management sounded cautiously optimistic on trajectory of recovery. January metrics were largely stable relative to December levels with non-intra Europe x-border volumes showing improvement. We believe MasterCard is well positioned for a post-pandemic recovery.

Investors receive a 0.60% dividend. The BofA Securities price target is $400, and the consensus target is $382.86. The final Mastercard stock trade on Monday was posted at $321.56.

Schlumberger

This top oil services company is expected to benefit from increased global exploration and production spending, and makes its debut on the US 1 list. Schlumberger Ltd. (NYSE: SLB) is the world’s largest provider of services and equipment used in drilling, evaluation, completion, production and maintenance of oil and natural gas wells.

The company operates in the oilfield service markets through three groups: Reservoir Characterization, Drilling and Production. Reservoir Characterization Group consists of the principal technologies involved in finding and defining hydrocarbon resources. These include WesternGeco, Wireline, Testing Services and Schlumberger Information Solutions.

Rising activity, backlog additions for integrated projects and the possibility that international pricing has bottomed should improve conditions for the rest of 2021. That should be supportive of improving earnings over the next few years, and the analysts noted this:

Supported by our view the oil and gas industry is on the cusp of a multi-year cyclical recovery, we are adding Schumberger to the US 1 list. While the United States has led the recovery thus far, we expect the next leg of the cycle to favor international markets, where the company earns >80% of revs. Compared to the last cycle, the stock has derated by almost 50%, which is simply too much derating, in our opinion.

Shareholders receive a 2.25% dividend. The $31 BofA Securities target price is well above the $22.16 consensus target for Schlumberger stock. Shares closed at $22.15 on Monday.


The team removed Cigna Corp. (NYSE: CI) and Fidelity National Information Services Inc. (NYSE: FIS) from the list, but both remain Buy rated.

Given the huge market moves over the past year, it may be wise to buy partial positions and see if we don’t indeed see a test of the 200-day moving average, or at least a sizable pullback. That noted, all these stocks are great additions to long-term growth portfolios and are in sectors that many feel will outperform this year.