The Nasdaq had a dreadful 2022, down a stunning 33% for the year. While the tech-heavy index has started off 2023 much better, up 5.9% as of the close Thursday, many investors are extremely nervous, especially given the recent uncertainty with the banking industry.
Some good news for investors looking to own the index? In its 50-year history, the Nasdaq has only had two down years in a row twice. The first was in 1973 and 1974 during the Arab oil embargo. The other was from 2000 to 2002, when the index fell three years in a row after the dot-com collapse, with the devastating attacks on 9/11 adding fuel to the fire.
Given that historical perspective, investors should feel somewhat better about owning the companies that make up the index. We decided to screen the index, looking for the highest-yielding stocks, and found these five have some solid defensive qualities and are offering among the best entry points in some time.
Stocks are listed in order of the highest yield.
This red-hot energy play looks poised to press higher again. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company focused on the acquisition, development, exploration and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas and New Mexico.
Diamondback Energy primarily focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin, as well as the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin.
The company also owns, operates, develops and acquires midstream infrastructure assets, including 770 miles of crude oil gathering pipelines, natural gas gathering pipelines and an integrated water system in the Midland and Delaware Basins.
Investors receive an 8.60% dividend, which is of the variable variety, meaning it could change depending on production and profits. Piper Sandler has a $207 target price on Diamondback Energy stock. The consensus target is $178.18, and the closing share price on Thursday was $125.53.
This huge drugstore chain operator is a safe retail play for investors looking to add health care now, and it trades at a cheap 7.5 times 2023 earnings expectations. Walgreens Boots Alliance Inc. (NASDAQ: WBA) operates as a pharmacy-led health and beauty retail company. It operates through three segments.
The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. It also provides specialty pharmacy services and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States; and six specialty pharmacies.
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