The stock market is putting together an impressive rally and looks poised to retest previous highs.
The POWR Ratings can help you identify the stocks with the best chances of outperformance. Some industries showing strength are healthcare, insurance, and housing.
Here is a quick look at five of the more intriguing POWR Rating upgrades: PPG Industries (PPG), Paychex (PAYX), Dover (DOV), DaVita (DVA), and Goosehead Insurance (GSHD).
PPG Industries (PPG)
Coatings applied for protection and decoration are big businesses as evidenced by PPG’s success. PPG’s business segments range from commodity chemicals and glass to optical and specialty materials, performance, and applied coatings, and industrial coatings.
The POWR Ratings show PPG has “A” grades in the Peer Grade, Buy & Hold Grade, and Trade Grade components. PPG is ranked first of 69 stocks in the Chemicals category. The company’s ’19 price return was 32.81%. PPG’s three-month price return is 21.84%. The stock’s five-year return is 42%.
The market’s best analysts are bullish on PPG, setting an average price target of $148.15, indicating the stock has a 10% upside. PPG has increased its dividends for nearly a quarter-century without exception. PPG’s brass recently upgraded its sales volume expectations for the third quarter.
The bottom line is the strong demand for paint and coatings should help PPG sustain its current price or climb even higher.
Now that the economy is bouncing back, hiring is picking up and payroll processors such as PAYX are set to rake in the cash. PAYX also provides human resources and employee benefits outsourcing services for businesses of varying types and sizes.
Take a look at the PAYX POWR Ratings, and you will find “A” grades in the Peer Grade, Trade Grade, and Buy & Hold Grade components. PAYX is ranked first of 57 publicly traded companies in the Outsourcing – Businesses Services segment.
PAYX is gradually making its way back toward its pre-COVID high of $90. Furthermore, Citi recently upgraded PAYX, setting a price target of $93 per share.
DOV has a fairly diversified product and components business spread across half a dozen segments including systems and technologies, resources, industries, and electronics. The stock has “A” POWR Rating grades in the Peer Grade, Trade Grade, Industry Rank, and Buy & Hold Grade components. DOV is ranked 5th of 60 Industrial – Machinery stocks. Check out DOV’s price returns and you will find a 65% return in ’19, a one-year return of 8%, and a six-month return of 27%.
The analysts anticipate DOV will pop all the way to $127.43, meaning it has the potential to rise by nearly 10%. The icing on the cake is the fact that DOV has raised its dividend every year across the past half-century.
DVA provides services related to the treatment of dialysis, helping those plagued by kidney failure. The POWR Ratings show DVA has “A” grades in the Buy & Hold Peer and Trade Grade components. The stock is ranked first of 70 in the Medical – Services sector.
Check out the top analysts’ take on DVA and you will find they are bullish, setting an average price target of $104.50, indicating there is a 7% upside. DVA has a fairly low forward P/E ratio of 12 along with a ’19 price return of 45%, a year-to-date price return of 28%, and a three-year return of 61%.
Goosehead Insurance (GSHD)
Insurance is not the most attractive sector in the context of investing but GSHD has emerged as one of the category’s superstars. GSHD sells auto, homeowner’s, earthquake, wind, life, commercial, and umbrella insurance.
GSHD has “A” grades in the Peer Grade, Trade Grade, and Buy & Hold Grade POWR Rating components. Add in the fact that GSHD is ranked first of nearly 60 publicly traded Insurance – Property & Casualty stocks and you have all the more reason to invest in this company.
GSHD had a ’19 price return of 61%. The stock has a year-to-date price return of 195%. GSHD’s three-month price return is 17%.
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DVA shares fell $0.15 (-0.15%) in premarket trading Friday. Year-to-date, DVA has gained 30.61%, versus a 10.19% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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