In this article, we discuss the 5 best mid-cap stocks to buy now. If you want to read the detailed analysis of mid-cap stocks, go directly to 13 Best Mid-Cap Stocks to Buy Now.
5. Nexstar Media Group, Inc. (NASDAQ:NXST)
Market Cap as of September 2: $7.42 billion
Nexstar Media Group, Inc. (NASDAQ:NXST) is the largest television station owner in the United States. Around 68% of households in the US have access to one or more of the company’s stations.
Nexstar Media Group, Inc. (NASDAQ:NXST) stock has been up by 26.77% in the last 12 months as of September 2. Furthermore, for the second quarter, the company posted GAAP EPS of $5.56, compared to the $5.05 consensus. The revenues were up 10.6% on a YoY basis to $1.25 billion. The total TV advertising revenue increased by 15.7% and digital revenue by 20% on a YoY basis. Distribution revenue was up 4.7% to $646 million, which set a new second-quarter record.
As of September 2, Nexstar Media Group, Inc. (NASDAQ:NXST) has a dividend yield of 1.89% and an annualized dividend payout of $3.60. The company has increased its dividends for nine years consecutively. Moreover, after reporting its Q2 earnings, the company authorized a share buyback program of $1.5 billion.
Here is what Richie Capital Group had to say about Nexstar Media Group, Inc. (NASDAQ:NXST) in its Q1 2022 investor letter:
“Nexstar Media Group (NXST up 24.8%) – The television broadcasting and digital media company surged during the quarter after presenting at an investor conference where management pointed to a strong 2022 for both political advertising and retransmission. They have exposure to more than 80% of markets with competitive mid-term political races. NXST is developing new ad categories, such as sports betting, and they are focused on expanding digital ad revenue and providing digital solutions to local advertisers. Auto advertising will return in the fall as auto dealerships re-enter the market to sell their replenished inventory.”
4. Mattel, Inc. (NASDAQ:MAT)
Market Cap as of September 2: $7.8 billion
Mattel, Inc. (NASDAQ:MAT) is a significant inflation-proof stock on our list. The company is the owner of Barbie and Hot Wheels.
At the end of Q2 2022, Mattel, Inc. (NASDAQ:MAT) posted an EPS 3x its estimates at $0.18. The revenue outperformed the estimates by $138 million after generating $1.24 billion, representing a 20% YoY growth. After the release of Hot Wheels NFTs, the company is also planning to announce its latest NFT collection, the Garage Series III.
The number of growth catalysts for Mattel, Inc. (NASDAQ:MAT) is significantly high. First, the company plans to relaunch its Monster High, Disney Princess, and Frozen franchises. Furthermore, the company has announced a multi-year licensing deal with SpaceX to launch toys inspired by the space venture, which will launch in 2023. On top of that, Mattel, Inc. (NASDAQ:MAT) is also looking to partner with Universal Studios to launch a toy line inspired by Jurassic World and Minions. This makes it one of the best mid-cap stocks to buy now.
Here is what Longleaf Partners has to say about Mattel, Inc. in its Q4 2021 investor letter:
“Mattel (24%, 1.40%; 16%, 0.96%), the global toy and media company, was a strong contributor in the fourth quarter and for the year. Despite store closures in Asia causing -20% regional revenues during the third quarter, Mattel’s consolidated sales still grew 8% due to its strong North American recovery. Barbie sales remain impressive as they have been for years, American Girl is finally returning to growth, and Fisher Price is also recovering. The company is successfully passing through inflated costs with higher pricing and without losing volume. Despite the impressive results, the stock trades too low at less than 14x forward earnings, and that is before Mattel begins to monetize its massive non-earning asset Intellectual Property portfolio. Our appraisal of the value grew by more than 30% this year.”
3. Flex Ltd. (NASDAQ:FLEX)
Market Cap as of September 2: $7.96 billion
Flex Ltd. (NASDAQ:FLEX) is a Singaporean electronics manufacturing services (EMS) and original design manufacturer (ODM) company. In the June quarter, the hedge funds showed a positive sentiment towards the company, with 50 hedge funds holding bullish positions. In the previous quarter, 48 hedge funds had stakes in the company.
In July, Flex Ltd. (NASDAQ:FLEX) reported its FQ1 2023 earnings, according to which it exceeded its EPS estimates by $0.06 at an EPS of $0.54. The revenue of $7.35 billion outperformed its estimates by $540 million and was 15.9% above the last quarter results. Furthermore, the company exited the quarter with $2.65 billion in cash & cash equivalents, and the total debt dropped to $3.13 billion from $3.24 billion in the previous quarter.
On August 16, Credit Suisse analyst Shannon Cross initiated Flex Ltd. (NASDAQ:FLEX)’s coverage with an Outperform rating and a $24 price target. Cross mentioned that the company competes with six diversified end markets, which allow a natural offset to product launches and cyclical spending.
2. R1 RCM Inc. (NASDAQ:RCM)
Market Cap as of September 2: $8.58 billion
R1 RCM Inc. (NASDAQ:RCM) provides revenue cycle management to hospitals, health systems, and physician groups in the United States.
Earlier in the year, R1 RCM Inc. (NASDAQ:RCM) announced the acquisition of CloudMed for $4.1 billion. CloudMed provides revenue intelligence solutions for healthcare providers. Through the acquisition, R1 RCM Inc. (NASDAQ:RCM) expects to unlock cost synergies of around $85 million by mid-2024 and $98 million at the total run rate. The company also expects revenue injections over time. Before the deal, R1 RCM Inc. (NASDAQ:RCM) covered 95% of net patient revenue, and the rest of the 5% was driven solely by CloudMed.
On August 4, Deutsche Bank analyst George Hill maintained a Buy rating on R1 RCM Inc. (NASDAQ:RCM) and raised his price target to $31 from $26 after its Q2 results.
1. Jazz Pharmaceuticals plc (NASDAQ:JAZZ)
Market Cap as of September 2: $9.708 billion
Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is an Irish biopharmaceutical company specializing in neuroscience and oncology.
75% of Jazz Pharmaceuticals plc (NASDAQ:JAZZ)’s revenue is derived from its neuroscience segments, especially its sleep disorder medication. The company holds a monopoly over narcolepsy drugs. Narcolepsy has no cure, and around 150,000 to 200,000 Americans suffer from it, which means that the company will benefit from steady streams of income from the drug. According to recent reports, the company’s neuroscience sales recorded a 20% growth, while oxybate sales were 10% higher than the previous year. The oncology segment reported the most significant sales growth at 40%.
On August 5, H.C. Wainwright analyst Oren Livnat reiterated a Buy rating on Jazz Pharmaceuticals plc (NASDAQ:JAZZ) shares and lowered the price target to $204 from $210. The analyst believes that the company’s full-year earnings “will likely trounce guidance” if there is Xyrem generic by January.
You can also take a look at 10 Best Self-Driving Stocks To Invest In and 10 Best Affordable Tech Stocks to Invest In Now.
