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3 No-Brainer Stocks Begging to Be Bought Right Now

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Looking for the next big thing? Finding great stocks doesn't have to be complicated.

Searching for the next great investment opportunity can be daunting. But sometimes there's beauty in simplicity, and backing strong businesses that already have a clear runway for growth can do wonders for your portfolio's performance. 

With that in mind, we put together a panel of Motley Fool contributors and asked them to profile no-brainer stocks that will help you crush the market. Read on to see why they think industry leaders Salesforce.com (CRM 5.65%), American Tower (AMT 1.85%),  and Zillow Group (ZG 7.44%) (Z 7.56%) have what it takes to serve up big wins. 

A magnifying glass on hundred-dollar bills.

Image source: Getty Images.

Cash in as this software leader helps businesses grow

Keith Noonan (Salesforce)It's probably fair to say that Salesforce isn't the flashiest business under the sun. What does the company do? Well, customer relationship management software, of course.

A relatively bland description like that might be enough to start eyes glazing over. However, there's a strong business with a long runway for growth here, and investors seeking attractive risk-reward dynamics in the cloud software space should consider adding the stock at current prices. 

The software company provides customer retention, sales, and marketing services that help businesses simplify and automate daily operations, and it's also delivering an expanding variety of data analytics and communications products thanks to recent acquisitions. With its market-leading position in the CRM space and wide array of services, Salesforce is poised to benefit as enterprises continue to pursue digital transformation. 

Salesforce's strong moat and market-leading software put the company in solid position for long-term growth. It is already increasing sales at an impressive clip, with a target of a 24% boost this year, and it should be able to keep raising margins as it brings new customers on board and continues to sell expanded software products. 

What's more, the stock still looks reasonably valued despite rampant run-ups for many companies in the tech and software-as-a-service industries. The company's share price has climbed just 4% over the last year, but the stock stands a good chance of returning to market-crushing performance over the long term. With shares trading at roughly 59.5 times this year's expected earnings and less than 10 times expected sales, Salesforce is attractively valued for a fast-growing company in the SaaS space.

CRM services might not be the most exciting software category if you're seeking explosive growth, but Salesforce stock offers the potential for big gains and relatively little downside risk. 

American Tower is a smart inflation hedge

Jamal Carnette (American Tower): Whether transient or not, we know inflation is here to stay. That's why investors should take a fresh look at real estate investment trusts. Not only do REITs diversify a stock portfolio, they're also the easiest way to own physical property (a natural inflation hedge) while providing above-average dividend payouts.

However, the story gets better for American Tower, a REIT focused on wireless communication towers. Major telcos like T-Mobile, Verizon, and AT&T are battling to win the 5G race, which requires a significant investment in satellite towers and equipment.

American Tower acts as a landlord for these companies, renting out more than 200,000 communications sites (the physical tower bases and supporting land) that communication companies use for their satellites. Not only is the business highly stable with long-term contracts and high renewal rates, it also has negotiated rent-escalation clauses tied to an inflationary index.

American Tower stock has underperformed the greater S&P 500 over the last year despite posting strong results. In the most recent quarter, the company grew year-over-year revenue 20% and adjusted funds from operations by 19%. This allowed it to raise its dividend 15.5% over the prior-year period, and shares currently yield 1.7%, higher than the S&P 500's yield of 1.3%.

At first glance, the current yield might not get investors excited. But when they understand that American Tower is a dividend-growth juggernaut, boosting payouts every quarter since 2012, the story becomes more compelling. The REIT will continue to raise its dividend above inflation as 5G growth and negotiated price increases will boost funds from operations.

Housing prices are skyrocketing, but this leading housing stock is on sale

Jason Hall (Zillow Group): Zillow Group's class A shares are down more than 50% from the all-time high reached earlier this year. That's surprising considering how hot the real estate market is. The biggest reason? Here's a big part of the answer in one chart:

US Existing Home Sales Chart

U.S. existing home sales data by YCharts.

That's right. Despite massive demand for houses, sales of existing homes have actually fallen most of the year. As a result, investors caught up in the near term are ignoring Zillow's long-term prospects and incredible track record of growth. Sales of existing homes are falling because far fewer homeowners are putting their houses up for sale than we usually see:

US Existing Home Sales Chart

U.S. existing-home sales data by YCharts.

Some of that could be attributed to a permanent shift in older people aging in place instead of downsizing or moving in retirement. But the bigger factor is likely the lingering impacts of the pandemic  disrupting normal housing market behavior.

But to focus too closely on this ignores the larger point. Even if we don't see a big surge in existing-home inventory, the bigger trends are still in Zillow's favor. Millions of people count on its platform as the go-to place to buy and sell, particularly younger customers, who are becoming the majority of homebuyers. And with a burgeoning iBuying business, its share of the market is likely to continue growing. 

So while the market is caught up in near-term concerns, smart investors should buy Zillow while it's begging to be bought. 

Keith Noonan owns shares of AT&T. The Motley Fool owns shares of and recommends American Tower, Salesforce.com, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Zillow Group Stock Quote
Zillow Group
ZG
$37.40 (7.44%) $2.59
Salesforce Stock Quote
Salesforce
CRM
$160.25 (5.65%) $8.57
American Tower Stock Quote
American Tower
AMT
$221.25 (1.85%) $4.03
Zillow Group Stock Quote
Zillow Group
Z
$37.98 (7.56%) $2.67

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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