September brings about its own unique set of challenges; and with the way the year 2020 is going, we can reasonably expect these challenges to be more unique in nature.
But for myself, September has always felt like a second New Years; the leaves begin to change, kids are rushing to school to start a new grade and make new friends, and online back-to-school shopping means new stationary and technology in the home office!
It’s also a great time to review portfolios, finances, and goals in order to answer some pretty important questions:
- is my portfolio efficient given the state of the market?
- am I holding too much (or too little) cash?
- am I still diversified enough?
- are there any new assets I should consider buying?
- are any of my picks now overvalued?
So, with September hot on our heels, here are 4 stocks to watch for September 2020!
#1 – Amazon
The only way you haven’t heard about Amazon is if you were living on Mars over the course of the past few years. The e-commerce / artificial intelligence / streaming behemoth is the worlds most influential – and most valuable – company. It is one of the best performing stocks of 2020… and, in fact, of all time.
There are about 112 million Amazon Prime users in the USA alone, which means repeat customers who pay into the company for the extra perks. 20% of Amazon Prime members say that they purchase something a couple times every week, while 7% state that they make purchases every day.
Clearly, Amazon is loyal to its customers; and its customers are loyal to it.
With gross profit increasing at an insane rate, EPS in the 20s, and an EBITDA above $30 billion, Amazon is one of the most watched – and sought after – stocks in the world.
#2 – PayPal
PayPal changed the way consumers pay. It created a worldwide network allowing online payments to be made from customers to businesses. While it started out as only accepting payments on eBay, it has becoming one of the most well known and trusted payment systems in the world.
PayPal has had reliable regular increases in total revenue and cash since 2016 (where the data for my analyses usually end), and shares have seen an average of 11.33% annual return looking back 5 years.
#3 – MasterCard
Mastercard is one of the most well known and widely accepted forms of credit payment on the planet, but it didn’t always start out that way. During the debut of the Bank Americard in 1958, revenues were abysmal. Bank of America kept this information secret until profits started rolling in during 1961; then they started releasing their previous, weak numbers so other banks would see disaster in the opportunity. It was an an attempt to ward of competition, and it worked.
Mastercard went public in May 2006, selling 95.5 million shares at $39 per share. It has had steadily increasing revenues over the past 5 years, and EPS has shown similar trends (with the exception of 2016 which saw a 0.8% decrease YoY).
Dividend payments have never been cut or paused, with attractive increases since 2012. Since 2014, dividends have increased an average of 32.8% annually.
P/E ratio is currently above 40.0, so do your research in the industry and with competitors to see how this fares.
#4 – Walmart
Walmart saw super growth dividends between 1996 and 2013 in which the dividends increase exponentially. Since then, increases to its quarterly payout have been increasing, but on a linear scale. Regardless, with a payout ratio of about 48%, this is one of my favorite stocks to watch for September.
Walmart has over 11,000 stores across 27 countries, with about 1.5 million employees in the USA alone. It has seen over $120 billion in gross profit each year, with 2019 ending closer to $130 billion.
Free cash flow has been hovering around 15-18 billion for the past few years, and great inventory ratios make this an attractive security to look into further.
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