Stimulus Pushes Wall Street To A Record High: 5 Top Picks

Finally, on Apr 15, despite strong economic data, the yield on the benchmark 10-Year U.S. Treasury slid to a one-month low of 1.53% before closing at 1.57%. Notably, the yield soared from a mere 0.91% at the end of 2020 to 1.78% in late March, resulting in a sharp decline of high-growth-oriented technology stocks.

Robust Early Trends for Q1 Earnings

The first-quarter 2021 earnings season has started with much vigor as most of the major banks have outperformed expectations. As of Apr 14, just 26 S&P 500 companies reported results. Total earnings of these companies are up 118.5% year over year on 9.4% higher revenues, with 80.8% beating EPS estimates and 84.6% beating revenue estimates.

For the first quarter as a whole, total earnings of the S&P 500 companies are expected to be up 24.1% from the same period last year on 6.0% higher revenues.

High Expectations for 2021 GDP Growth

According to several published reports, the U.S. economy is likely to grow by 6.5-7% in 2021, its highest rate in 33 years. On Apr 15, the Atlanta Fed's GDPNow tracker estimated that the U.S. GDP in the first quarter of 2021 will jump 8.3%.

Our Top Picks

We have narrowed down our search to five U.S. corporate bigwigs (market capital > 50 billion) as these companies have a well-established business model and powerful brand value. These stocks have strong upside potential for 2021 and witnessed robust earnings estimate revisions in the last 7 to 30 days.

Moreover, all these stocks have strong long-term (3-5) growth prospects and have provided more than 20% returns year to date. Also, these companies are regular dividend payers providing an important income stream during a market downturn. Finally, each of our picks carries a Zacks Rank #1 (Strong Buy). 

The chart below shows the price performance of our five picks year to date.

Exxon Mobil Corp. (XOM Quick Quote XOM - Free Report) has an expected earnings growth rate of more than 100% for the current year. The company has a long-term growth rate of 9.5%. The Zacks Consensus Estimate for the current year has improved 4.8% over the last 7 days. The stock price of the company has climbed 38.2% year to date, The company has a current dividend yield of 6.3%.

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