In this article, we discuss 5 best Roth IRA stocks to buy and hold for long term. If you want to read our detailed analysis of retirement accounts and their rising demand, click 10 Best Roth IRA Stocks to Buy and Hold for Long Term.
5. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Holders: 33
American Electric Power Company, Inc. (NASDAQ:AEP) is an Ohio-based electric utility company that serves customers in 11 states.
American Electric Power Company, Inc. (NASDAQ:AEP) currently pays a quarterly dividend of $0.78 per share, raising it by 5% in October 2021. The company has been raising its dividends for the past 12 years and has been making dividend payments every quarter since 1910. Its operating EPS payout ratio stands at 63.3% and is expected to reach 63.8% in FY22. As of July 15, the stock’s dividend yield came in at 3.28%.
In May, Credit Suisse initiated its coverage of American Electric Power Company, Inc. (NASDAQ:AEP) with an Outperform rating and a $113 price target, appreciating the company’s operating portfolio and its growing assets.
At the end of March 2022, 33 hedge funds in Insider Monkey’s database owned stakes in American Electric Power Company, Inc. (NASDAQ:AEP), down from 34 a quarter earlier. The collective value of these stakes is nearly $430 million. Cliff Asness, Israel Englander, and Jim Simons were some of the company’s major stakeholders in Q1.
ClearBridge Investments mentioned American Electric Power Company, Inc. (NASDAQ:AEP) in its Q1 2022 investor letter. Here is what the firm has to say:
“About 5% of the portfolio is in transitioning power companies, typically migrating from coal to renewables. We have been active in encouraging these transitions and added a new position in American Electric Power (NASDAQ:AEP). AEP has the fastest planned renewable energy ramp in the U.S., with plans to both shrink coal and grow renewables by 50% each by 2030. This would drive an 80% emissions reduction, while supporting high single-digit earnings growth at a double-digit return.”
4. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 56
Lockheed Martin Corporation (NYSE:LMT) is an American aerospace company that specializes in defense and information security. In July, the US Air Force successfully tested the company’s hypersonic missile off the California coast, which shows progress in the country’s hypersonic weapons development.
In Q1 2022, Lockheed Martin Corporation (NYSE:LMT) reported $1.4 billion in cash from operations and $1.1 billion in free cash flow. The company paid $767 million in dividends in Q1, which shows that its payments are well-covered by its assets. Lockheed Martin Corporation (NYSE:LMT) currently offers a quarterly payout of $2.80 per share, with a yield of 2.79%, as of July 15. The company has a solid dividend history, paying consistent dividends to shareholders since 1996. It maintains a 19-year track record of consecutive dividend growth.
In May, Argus lifted its price target on Lockheed Martin Corporation (NYSE:LMT) to $500 with a Buy rating on the shares. The firm appreciated the company’s consistent results over the years.
Insider Monkey’s Q1 2022 database shows that Lockheed Martin Corporation (NYSE:LMT) was popular among elite funds, as the company was a part of 56 hedge fund portfolios, up from 42 in the previous quarter. These hedge funds hold collective stakes in the company worth over $2.4 billion.
Ariel Investments mentioned Lockheed Martin Corporation (NYSE:LMT) in its Q3 2021 investor letter. Here is what the firm has to say:
“Conversely, leading global defense contractor Lockheed Martin Corporation (LMT) was the greatest detractor over the trailing one-year period due to pared back F-35 delivery plans and weaker than expected 2022 sales guidance. Nonetheless, we remain confident in LMT’s positioning as they continue to secure a steady stream of lucrative contracts and benefit from a sizeable backlog. Looking ahead, management is focused on driving innovation, underscored by the pending acquisition of Aerojet Rocketdyne enabling vertical integration in propulsion systems for space and missile defense. At today’s valuation, LMT is currently trading at a 32% discount to our estimate of private market value.”
3. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 69
An American multinational tech company, Verizon Communications Inc. (NYSE:VZ) was appreciated by Street analysts as it reported strong growth on various accounts in Q1. In June, Scotiabank assumed its coverage on the stock with an Outperform rating and a $59 price target, calling it defensive stock to buy during a recession.
Verizon Communications Inc. (NYSE:VZ) has not trimmed its dividend since 1985 and maintains a 15-year streak of dividend growth. The company currently pays a quarterly dividend of $0.64 per share, with a yield of 5.02%, as of July 15. In Q1 2022, the company’s cash from operating activities came in at $6.8 billion and its free cash flow amounted to $1 billion.
As per Insider Monkey’s data, 69 hedge funds held positions in Verizon Communications Inc. (NYSE:VZ) in Q1, with stakes valued at over $4 billion. In comparison, 63 hedge funds owned stakes in the New York-based company in the previous quarter, valued at over $10.8 billion. Fisher Asset Management was the company’s leading shareholder in Q1.
Weitz Investment Management mentioned Verizon Communications Inc. (NYSE:VZ) in its Q4 2021 investor letter. Here is what the firm had to say:
“After several quarters of pandemic-induced outsized growth, new broadband connection growth has slowed for U.S. cable operators. This slower growth has coincided with a renewed push by competitors like Verizon and AT&T to offer high-speed data (either via wireless connects or by building new fiber-optic networks).”
2. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 76
AbbVie Inc. (NYSE:ABBV) is a strong dividend player, raising its dividend consecutively for the past 50 years, including its years as Abbott’s subsidiary before 2013. The biopharmaceutical company’s current quarterly dividend stands at $1.41 per share. In the past five years, the company raised its dividend at a CAGR of 17.5%. Moreover, AbbVie Inc. (NYSE:ABBV) expects to exceed $13 billion in free cash flow in FY22.
In July, Morgan Stanley raised its price target on AbbVie Inc. (NYSE:ABBV) to $191 with an Overweight rating on the shares, ahead of the company’s Q2 results. The firm further expects the company’s revenues to remain resilient if the economy slows down in the last six months of the year.
As per Insider Monkey’s database, 76 hedge funds owned stakes in AbbVie Inc. (NYSE:ABBV), down from 82 in the previous quarter. The collective value of these stakes is over $3.6 billion.
Carillon Tower Advisers mentioned AbbVie Inc. (NYSE:ABBV) in its Q1 2022 investor letter. Here is what the firm has to say:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. AbbVie (NYSE:ABBV) is a research-based biopharmaceutical company. Shares gained after the company reported earnings that missed revenue but beat earnings-per-share estimates. Discussion around the report was mixed but skewed positive.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 102
NVIDIA Corporation (NASDAQ:NVDA) is a California-based multinational technology company that specializes in artificial intelligence hardware and software.
NVIDIA Corporation (NASDAQ:NVDA) ended Q1 2022 with $20.3 billion available in cash and cash equivalents and $1.34 billion in free cash flow. The company paid $2.10 billion to shareholders in share repurchases and cash dividends during the quarter. NVIDIA Corporation (NASDAQ:NVDA) currently offers a quarterly dividend of $0.04 per share, with a yield of 0.10%, as of July 15.
Of the 900+ elite funds tracked by Insider Monkey, 102 hedge funds owned stakes in NVIDIA Corporation (NASDAQ:NVDA) in Q1, down from 110 in the previous quarter. The total value of these stakes is over $6.3 billion.
RiverPark Funds mentioned NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2022 investor letter. Here is what the firm has to say:
“Nvidia is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.
We expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”
You can also take a look at 12 Best Bear Market Stocks to Buy Now and Top Stock Picks of Michael Burry.
