The stock market indexes continue to hit new all-time highs, and though all parties must eventually come to an end, there are indications this one still has some room to run.
Consider, for example, that the U.S. economy is nearly fully reopened, over 55% of the population has received at least one dose of COVID-19 vaccination and almost half are fully vaccinated, and the unemployment rate continues to head lower -- and will probably drop even more considerably when the government stops paying people more to stay home than they can earn in the job market.
That signals an additional boost to business later in the year, meaning now is a good time to find great stocks that are on sale. The following three top stocks look particularly attractive, with a chance to make investors richer.
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1. Bed Bath & Beyond
You might think Bed Bath & Beyond (BBBY) is an odd candidate to fall under a list of "great" stocks, but the home-goods retailer is not the same company it was last year, and it now has a real shot at turning its business around.
Coming out of the pandemic that shut down all of its stores, Bed Bath & Beyond is enjoying a streak of four consecutive quarters of sales growth and remains profitable, even if last quarter's earnings missed analyst expectations. The retailer has raised guidance for the full year for the top and bottom line, defying the short-sellers who were convinced it was about to go under.
The real key to its success is that it's focusing once more on its core operations, having shed virtually every business that wasn't in its wheelhouse. It also has a new management team and board of directors fully on board with the direction the company is taking.
Best of all, Bed Bath & Beyond continues to be a cash-generating machine, having already produced $62 million in free cash flow (FCF) this quarter, with that number expected to grow much faster in the coming quarters. That means the retail stock trades at just 7 times FCF, a bargain-basement valuation, as well as 13 times earnings estimates and a fraction of its sales.
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2. Enterprise Products Partners
You don't hear too much about "peak oil" anymore, as vast discoveries offshore and drilling innovations have allowed access to oil and gas reserves in previously hard-to-reach formations, meaning that fossil fuels will be with us for years to come, if not decades.
That's going to make transporting and storing these energy assets a key component of our future energy security, and pipeline and processing specialist Enterprise Products Partners (EPD 1.41%) will be among those reaping the benefits.
Enterprise is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs), crude oil, refined products, and petrochemicals. It has over 50,000 miles of pipeline, 21 processing plants for NGLs, and 260 million barrels of storage capacity for NGLs, crude oil, refined products, and petrochemicals, along with 14 billion cubic feet of natural gas storage capacity.
Because its revenue tends to come from long-term fixed-fee or take-or-pay contracts that ensure Enterprise gets paid regardless of whether customers take the product or not, its very predictable cash flow has enabled the midstream company to pay an ever-increasing dividend. In fact, Enterprise has raised its payout for 22 consecutive years.
Trading at 11 times next year's earnings and offering a dividend that yields 7.4% annually, Enterprise Products Partners is a stable, high-yielding energy stock that can still be purchased relatively cheaply.
Image source: Getty Images.
3. Teladoc
When even routine doctor visits became nearly impossible during the pandemic, virtual-visit technology such as what Teladoc (TDOC -1.52%) offers became a literal lifeline for patients.
Teladoc saw U.S. visits surge 156% in 2020, hitting 8.8 million, while international visits reached 1.7 million, a 71% increase from the prior year. That trend hasn't let up in 2021, even with a more relaxed atmosphere about visiting public places. While they've certainly slowed down as one would expect, U.S. visits were still up 69% over last year's first quarter, and international visits were 8% higher.
The company also reported that the number of consumers enrolled in more than one chronic-care program tripled year over year.
While there are concerns over just how much growth Teladoc can continue producing, it's likely that many patients, having experienced the convenience that telemedicine offers -- who really wants to sit in an overbooked waiting room to be seen? -- will keep coming back. Furthermore, millennials are more inclined to use digital health options than older generations are, giving Teladoc a pipeline to future growth.
Shares of Teladoc have been cut in half from the highs they hit earlier this year, and that makes it a great healthcare company investors can buy on sale.
