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5 Key Stocks to Invest in 2020 and Beyond

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Let’s cut to the chase. Here are the four types of stocks that you’ll want to be invested in 2020 and beyond. 

Rome, Italy. Image by Andrea Spallanzani from Pixabay

Tech stocks: e-commerce, cloud

Too many businesses have been impacted by the COVID-19 pandemic — some more so than others. Restaurants, tourism, and retailers have been more greatly impacted. On the contrary, the tech space has outperformed, as most tech companies operate in a growing pie. 

Particularly, you’ll want to invest in tech stocks that have exposure to e-commerce, cloud, or growing markets. Many of these stocks don’t pay a dividend, but investors should consider them for growth. 

Here are some examples: Alibaba (NYSE:BABA), Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG), Amazon (NASDAQ:AMZN), JD.com(NASDAQ:JD), Microsoft (NASDAQ:MSFT), Tencent (TCEHY), etc. They have greatly outperformed the U.S. stock market in different time frames, but the chart below shows the past five years.

Chart
Data by YCharts

Healthcare stocks

Healthcare is also another growth area you’ll want to stay invested in. There’s the megatrend of an aging population.  Additionally, healthy people want to stay healthy and sick people cannot go on without their drugs or medical devices. 

The most conservative investors would look into adding Johnson & Johnson (NYSE:JNJ) opportunistically as a core holding. Bristol-Myers (NYSE:BMY) is another quality dividend payer. JNJ yields 2.6%, while BMY yields 2.9%.

Abbott Labs (NYSE:ABT) and Medtronic (NYSE:MDT) are also A-grade healthcare stocks to consider on dips. 

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Stock Market Crash Coming: 2 Stock Investing Strategies

We believe the stock market has recovered too fast and that stock market crash 2.0 is coming.

COVID-19 is undoubtedly the biggest drag on the global economy. The pandemic has pushed up unemployment rates and pulled down GDP, as it swept through and destroyed multiple industries (think tourism, hospitality, brick-and-mortar retailers, retail real estate).

Some are optimistic about the situation, thinking that vaccines can save the day. Unfortunately, even when effective vaccines become available, it’s going to take quarters, if not years, for the economy to recover.

Additionally, COVID-19 isn’t the only thing that’s weighing on the global economy. Let’s not forget about trade wars, anti-racism protests, low energy prices, high debt levels, and the upcoming U.S. presidential election. They all add pressure and or uncertainty to the economy.

With the above backdrop in mind, here are two stock investing strategies you can consider. 

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3 Important Dividend Stocks In My Stock Portfolio

I have a strong reason to keep dividend stocks, Johnson & Johnson (NYSE:JNJ), Brookfield Infrastructure Partners L.P. (TSX:BIP.UN, NYSE:BIP), and Toronto-Dominion Bank (TSX:TD, NYSE:TD), in my portfolio.

Johnson & Johnson logo

Johnson & Johnson

Allow me to be crystal clear. J&J will not deliver the highest returns as a stock in the healthcare space. I have other stocks for that. At the moment, that includes deep-value dividend stock, CVS Health (NYSE:CVS).

However, J&J’s financial performance is highly stable and predictable. Since 1999, the diversified healthcare conglomerate has increased earnings every single year on a per-share basis. Not surprisingly, it has increased its dividend every year in that period as well. 

Source: F.A.S.T. Graphs – J&J’s earnings and dividends persistently grow

Therefore, J&J stock serves as an excellent anchor for a diversified portfolio. Even when a recession hits, there’s no need to worry about its staying power. In fact, in the last two recessions, it thrived with double-digit earnings and dividend growth!

To sum it up, JNJ stock serves as a stabilizer and high-quality cash cow in my portfolio. I’ll continue adding to it at good valuations as a core holding of my diversified portfolio. 

Currently, I’d consider the stock to be fairly valued to modestly undervalued. At $135 per share, it trades at 15.7x earnings and is estimated to have earnings-per-share growth of 6% per year over the next three to five years. The stock also tends to command a premium multiple due to its high quality.

JNJ stock offers a safe yield of 2.8% backed by a payout ratio of 44%. It’s set to increase its dividend in late April.  

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