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5 Must-Buy High-Flying Non-Tech S&P 500 Stocks for 2H
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U.S. stock markets have been witnessing a dream run for the past 18 months. The broad-market index — S&P 500 — has rallied 17.5% year to date, after climbing 23.9% in 2023. The benchmark has recorded 35 all-time highs on both intraday and closing basis this year.
Wall Street market participants have turned optimistic about interest rate cuts by the Fed following the recently released soft economic readings. The CME FedWatch tool currently shows a 78% probability of a Fed fund rate cut by 25 basis points in September. This probability was around 62% just a week ago. Moreover, the interest rate derivative tool also shows a 76.5% probability of two rate cuts by the end of 2024.
The ongoing rally was led by a massive thrust toward artificial intelligence (AI), especially generative AI. Consequently, the major gainers were technology giants. Other stocks, especially the so-called “magnificent 7” stocks also contributed significantly. Research firm Piper Sandler has observed that the top 10 stocks represent 75% of the S&P 500’s year-to-date returns.
Meanwhile, several non-tech S&P 500 stocks have also flourished, providing higher returns than the benchmark itself year to date. A few of those stocks currently carry a favorable Zacks Rank with solid upside left for the rest of 2024.
Our Top Picks
We have narrowed our search to five such S&P 500 stocks. These stocks have strong potential and have seen positive earnings estimate revisions in the last 60 days. Moreover, these stocks are regular dividend payers, which will act as an income stream. Each of our picks carries either a Zacks Rank#1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Vistra Corp. (VST - Free Report) operates as an integrated retail electricity and power generation company. VST retails electricity and natural gas to residential, commercial, and industrial customers across 20 states in the United States and the District of Columbia.
VST operates through six segments: Retail, Texas, East, West, Sunset, and Asset Closure. VST is involved in electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities.
Zacks Rank #1 Vistra has an expected revenue and earnings growth rate of 15% and 10%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 30 days. The stocks price has soared 140.6% year to date.
VST has a current dividend yield of 1%. The average price target of brokerage firms represents an increase of 28.6% from the last closing price of $92.88. The brokerage target price is currently in the range of $103-$133.
Constellation Energy Corp. (CEG - Free Report) generates and markets electricity. CEG’s operating segment consists of the Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions. CEG sells natural gas, renewable energy and other energy-related products and services. CEG serves distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers.
Zacks Rank #1 Constellation Energy has an expected earnings growth rate of 52.7% for the current year. Although its revenue growth rate is negative for the current year, it is 2.4% for next year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last 30 days. The stock price has jumped 84.9% year to date.
CEG has a current dividend yield of 0.7%. The average price target of brokerage firms represents an increase of 11.5% from the last closing price of $215.73. The brokerage target price is currently in the range of $217-$250.
GE Aerospace (GE - Free Report) has been witnessing strength in its Aerospace business, driven by robust demand for commercial engines and services. Rising U.S. & international defense budgets, geopolitical tensions, positive airline & airframer dynamics and robust demand for commercial air travel auger well for GE.
GE’s portfolio reshaping actions are likely to unlock values for its shareholders. GE remains committed to making investments to boost growth and provide better services to its customers. For 2024, GE expects organic revenues to grow at least in the low-double-digit range from the year-ago levels.
Zacks Rank #2 GE Aerospace has an expected earnings growth rate of 43.1% for the current year. Although its revenue growth rate is negative for the current year, it is 14.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last seven days. The stock price has surged 28.1% year to date.
GE has a current dividend yield of 0.7%. The average price target of brokerage firms represents an increase of 16.3% from the last closing price of $163.53. The brokerage target price is currently in the range of $160-$211.
Westinghouse Air Brake Technologies Corp. (WAB - Free Report) continues to benefit from solid growth across its Freight and Transit segments. While the Freight segment benefits from growth in services and components, the transit segment gains from strong aftermarket and original equipment manufacturing sales.
For full-year 2024, WAB expects sales in the $10.25-$10.55 billion band. Adjusted earnings per share for 2024 are estimated to be between $7.00 and $7.4.0. WAB anticipates strong cash flow generation, with operating cash flow conversion exceeding 90%.
Zacks Rank #2 Westinghouse Air Brake Technologies has an expected revenue and earnings growth rate of 7.1% and 24%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 30 days. The stock price has advanced 23.5% year to date.
WAB has a current dividend yield of 0.5%. The average price target of brokerage firms represents an increase of 10.9% from the last closing price of $156.72. The brokerage target price is currently in the range of $135-$190.
Leidos Holdings Inc.’s (LDOS - Free Report) cost-effective defense solutions continue to witness increased contract wins from the Pentagon and other U.S. allies. These contract wins led to a solid backlog of $36.57 billion at the end of March 2024, thereby substantially bolstering LDOS’ revenue growth prospects.
While consistent contract wins contribute to LDOS’ organic growth, significant acquisitions bolster its inorganic performance. In 2023, the Cobham Special Mission acquisition boosted the company’s revenues by $94 million. A substantial U.S. defense budget is another major growth driver for it. LDOS holds a solid solvency position.
Leidos Holdings has an expected revenue and earnings growth rate of 4.4% and 19.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the last 60 days. The stock price has climbed 34.4% year to date.
LDOS has a current dividend yield of 1.1%. The average price target of brokerage firms represents an increase of 9.6% from the last closing price of $145.56. The brokerage target price is currently in the range of $135-$180.
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5 Must-Buy High-Flying Non-Tech S&P 500 Stocks for 2H
U.S. stock markets have been witnessing a dream run for the past 18 months. The broad-market index — S&P 500 — has rallied 17.5% year to date, after climbing 23.9% in 2023. The benchmark has recorded 35 all-time highs on both intraday and closing basis this year.
Wall Street market participants have turned optimistic about interest rate cuts by the Fed following the recently released soft economic readings. The CME FedWatch tool currently shows a 78% probability of a Fed fund rate cut by 25 basis points in September. This probability was around 62% just a week ago. Moreover, the interest rate derivative tool also shows a 76.5% probability of two rate cuts by the end of 2024.
The ongoing rally was led by a massive thrust toward artificial intelligence (AI), especially generative AI. Consequently, the major gainers were technology giants. Other stocks, especially the so-called “magnificent 7” stocks also contributed significantly. Research firm Piper Sandler has observed that the top 10 stocks represent 75% of the S&P 500’s year-to-date returns.
Meanwhile, several non-tech S&P 500 stocks have also flourished, providing higher returns than the benchmark itself year to date. A few of those stocks currently carry a favorable Zacks Rank with solid upside left for the rest of 2024.
Our Top Picks
We have narrowed our search to five such S&P 500 stocks. These stocks have strong potential and have seen positive earnings estimate revisions in the last 60 days. Moreover, these stocks are regular dividend payers, which will act as an income stream. Each of our picks carries either a Zacks Rank#1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Vistra Corp. (VST - Free Report) operates as an integrated retail electricity and power generation company. VST retails electricity and natural gas to residential, commercial, and industrial customers across 20 states in the United States and the District of Columbia.
VST operates through six segments: Retail, Texas, East, West, Sunset, and Asset Closure. VST is involved in electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities.
Zacks Rank #1 Vistra has an expected revenue and earnings growth rate of 15% and 10%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 30 days. The stocks price has soared 140.6% year to date.
VST has a current dividend yield of 1%. The average price target of brokerage firms represents an increase of 28.6% from the last closing price of $92.88. The brokerage target price is currently in the range of $103-$133.
Constellation Energy Corp. (CEG - Free Report) generates and markets electricity. CEG’s operating segment consists of the Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions. CEG sells natural gas, renewable energy and other energy-related products and services. CEG serves distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers.
Zacks Rank #1 Constellation Energy has an expected earnings growth rate of 52.7% for the current year. Although its revenue growth rate is negative for the current year, it is 2.4% for next year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last 30 days. The stock price has jumped 84.9% year to date.
CEG has a current dividend yield of 0.7%. The average price target of brokerage firms represents an increase of 11.5% from the last closing price of $215.73. The brokerage target price is currently in the range of $217-$250.
GE Aerospace (GE - Free Report) has been witnessing strength in its Aerospace business, driven by robust demand for commercial engines and services. Rising U.S. & international defense budgets, geopolitical tensions, positive airline & airframer dynamics and robust demand for commercial air travel auger well for GE.
GE’s portfolio reshaping actions are likely to unlock values for its shareholders. GE remains committed to making investments to boost growth and provide better services to its customers. For 2024, GE expects organic revenues to grow at least in the low-double-digit range from the year-ago levels.
Zacks Rank #2 GE Aerospace has an expected earnings growth rate of 43.1% for the current year. Although its revenue growth rate is negative for the current year, it is 14.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last seven days. The stock price has surged 28.1% year to date.
GE has a current dividend yield of 0.7%. The average price target of brokerage firms represents an increase of 16.3% from the last closing price of $163.53. The brokerage target price is currently in the range of $160-$211.
Westinghouse Air Brake Technologies Corp. (WAB - Free Report) continues to benefit from solid growth across its Freight and Transit segments. While the Freight segment benefits from growth in services and components, the transit segment gains from strong aftermarket and original equipment manufacturing sales.
For full-year 2024, WAB expects sales in the $10.25-$10.55 billion band. Adjusted earnings per share for 2024 are estimated to be between $7.00 and $7.4.0. WAB anticipates strong cash flow generation, with operating cash flow conversion exceeding 90%.
Zacks Rank #2 Westinghouse Air Brake Technologies has an expected revenue and earnings growth rate of 7.1% and 24%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the last 30 days. The stock price has advanced 23.5% year to date.
WAB has a current dividend yield of 0.5%. The average price target of brokerage firms represents an increase of 10.9% from the last closing price of $156.72. The brokerage target price is currently in the range of $135-$190.
Leidos Holdings Inc.’s (LDOS - Free Report) cost-effective defense solutions continue to witness increased contract wins from the Pentagon and other U.S. allies. These contract wins led to a solid backlog of $36.57 billion at the end of March 2024, thereby substantially bolstering LDOS’ revenue growth prospects.
While consistent contract wins contribute to LDOS’ organic growth, significant acquisitions bolster its inorganic performance. In 2023, the Cobham Special Mission acquisition boosted the company’s revenues by $94 million. A substantial U.S. defense budget is another major growth driver for it. LDOS holds a solid solvency position.
Leidos Holdings has an expected revenue and earnings growth rate of 4.4% and 19.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the last 60 days. The stock price has climbed 34.4% year to date.
LDOS has a current dividend yield of 1.1%. The average price target of brokerage firms represents an increase of 9.6% from the last closing price of $145.56. The brokerage target price is currently in the range of $135-$180.