Analysts are increasingly optimistic about the future of the U.S. economy. Recent data shows strong growth in the Q4 2023 and continued resilience in the job market. Economists now expect the gross domestic product (GDP) to expand by 2%, double the pace predicted at the end of the previous year. This positive outlook has led to upgraded forecasts, with the consensus suggesting that the Federal Reserve may delay interest rate cuts until the summer, signaling robust economic health and sustained consumer spending. The stock market mirrors economic growth, meaning it should perform well. If you want to benefit from this boom, these are the top S&P 500 stocks to buy.
Goldman Sachs (GS)
Goldman Sachs (NYSE:GS) is a leading global financial services company in investment banking, securities and investment management. Valued at $387.60, GS stock saw a growth of 98.25% in the past five years.
As one of the top three players in the investment banking industry, Goldman Sachs commands 6.7% of the investment banking industry. The company dominates the mergers and acquisitions part of the investment banking industry with a market share of 31.2%. It currently holds a market cap of $127.26 billion.
Goldman Sachs consistently reports strong financial data across multiple figures. In FY 2023, Goldman reported revenues of $45 billion, a 2.54% YOY increase. Stronger figures reported a net income of $8.5 billion, and diluted EPS at $22.87, marking 24.38% and 23.93% increases, respectively.
Goldman Sachs plans on expanding its business into consuming banking through its Marcus application. Goldman had a successful history in mergers and acquisitions and is looking towards diversifying its business. The company maintains strong balance sheets with $241.57 billion in cash facilitating its rapid expansion. Goldman’s exceptional relations with its clients and huge cash balance mean it can grow sustainability in its expansion plans to potentially disrupt the markets. In conclusion, Goldman Sachs is poised for consistent and strong growth outlying the company from the rest of the S&P 500.
Walt Disney (DIS)
Walt Disney (NYSE:DIS) is an American multinational mass media and entertainment conglomerate. After creating iconic TV shows and movies, DIS has amassed a valuation of $110.34 with a strong YOY valuation increase of 7.26%.
While fully established in the market, Disney still shows signs of future growth. In 2023, the entertainment sector was valued at $197.63 billion. Now, the sector is expected to show an annual growth rate of 10.64% through 2027.
Financially, DIS improved on nearly every metric during Q3 2023. DIS reported $23.55 billion in revenue, marking a YOY increase of .16%. Net income and net profit margin also received massive surges of $1.91 billion and $8.11 billion respectively, both increasing over 49% YOY. Overall, Q3 2023 proved to be successful for DIS as the company outperformed previous years on EPS by 23%.
Disney recently announced a crack down on password-sharing services, following Netflix’s (NASDAQ:NFLX) example. According to analysts, Disney is losing about $1.2 billion a year from customers sharing passwords. The Motley Fool states that “streaming revenues are very high-margin for Disney, and $1.2 billion in revenue could generate an extra $840 million in free cash flow.” As DIS emphasizes eliminating this factor, expect DIS’s valuation to climb.
Home Depot (HD)
Home Depot (NYSE:HD) is a home improvement retail chain, with products ranging from construction tools to transportation rentals.
HD stock is currently up 8.12% YTD. The stock shows considerable value for its price, with a PE ratio of 24.92%. Most analysts would give the stock a “buy” rating, looking forward to an average price target of $379.65.
The home improvement market is forecasted to grow to $717.6 billion by 2032 — a CAGR of 6.5%. A recent interest in improving aesthetic attractiveness has been a prominent motivator of consumer interest in the industry. Additionally, urbanization and technological advances have had an impact on newer, more sustainable equipment for home improvement.
At first glance, Home Depot’s financials may not look very promising; revenue in the 2023-2024 year was down 3.01% from the previous year. However, the company has ensured profitability by increasing its ST investments from $2,757 million to $3,760 million.
Home Depot benefits from being the largest retailer of home improvement products within the U.S. Rising consumer interest in aesthetically pleasing is certainly helping the company find growth opportunities. Additionally, Home Depot has been expanding its customer base, donating money to veterans, historically black college campuses and millennials.
Home Depot’s solid performance as a stock along with its steps taken to gain revenue make it a solid stock to buy.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.