It's never a bad time to get started with investing. When the markets were hot last year, there was a lot of excitement in the stock market. But now, that optimism has turned to bearishness amid falling share prices. The good news, however, is that this can make today an opportune time to invest in stocks, with lower valuations giving investors more bang for their buck.
Three solid stocks that are down more than 10% year to date include Thermo Fisher Scientific (TMO 4.78%), McDonald's (MCD 0.47%), and Walt Disney (DIS 1.54%). By buying and holding these stocks, you can profit not just from rising share prices but also some dividend income along the way. Here's why these are investments new investors should feel comfortable adding to their portfolios.
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1. Thermo Fisher Scientific
Healthcare giant Thermo Fisher is coming off a strong year in 2021, where sales of $39.2 billion grew 22% from the previous year. Although the company's acquisitions have helped the business grow over the years, Thermo Fisher's organic revenue growth of 17% was the main driver behind last year's strong numbers, as was COVID-19-related revenue (testing products) of more than $9.2 billion.
It's a broad business, encompassing life sciences solutions, analytical instruments, specialty diagnostics, laboratory products, and biopharma services -- thus, giving investors excellent exposure to the healthcare industry through just a single investment.
For 2022, the company continues to expect its numbers to rise, projecting revenue to grow by 7% to $42 billion. Management also said on its latest earnings call that core organic revenue will be able to generate a long-term growth rate between 7% and 9%.
In light of the strong performance and expectations, the company also raised its dividend payment by four cents to $0.30. Its yield of 0.2% is still modest compared to the S&P 500 average of 1.3%, but it's a way for investors to help pad their overall returns over the years.
Despite its strong operations, Thermo Fisher stock is down 12% in 2022 (worse than the S&P 500's losses of 6%). However, the lower price can provide an incentive for investors to buy up the stock today while it is at a reduced value.
2. McDonald's
Fast-food company McDonald's is one of the safer ways to invest in the restaurant industry. The company has been able to stay relevant and popular with consumers over the years through its ability to adjust its menu to cater to the latest trends. That's no more evident than through the McPlant burger that it is currently testing, which can take advantage of the rising popularity of plant-based meat products. If successful, that can help bolster its already strong financials.
In 2021, the company's revenue rose by 21% to $23.2 billion as it recovered from the initial effect of the pandemic and a down year in 2020. Its profit of $7.5 billion over the past 12 months was also 60% higher than the $4.7 billion of net income it reported a year earlier. Over the past five years, the company has normally generated a profit margin of at least 22% of revenue.
Its strong fundamentals put McDonald's in a solid position to take on any headwinds that come up, including the temporary closure of its Russian locations due to the country's war with Ukraine. Although that may cost the business $50 million per month, McDonald's is a company better-positioned than most to handle that kind of adversity. And over the long term, it's not an issue that's likely to last and weigh down its business.
In addition to being versatile, this is an investment that also pays a yield of 2.3%. McDonald's can be an ideal first investment for a new investor, especially on the dip -- year to date, the stock has fallen 12%.
3. Walt Disney
Every portfolio could use a top growth stock, and that's what investors can expect with Walt Disney. It's the only stock on this list that doesn't pay a dividend, but that's for good reason -- the company uses excess money to reinvest into its own operations. And those investments have been paying off. Its streaming service Disney+ is now up to 130 million subscribers and is less than 100 million shy of rival Netflix.
Plus, there's also the company's theme parks, which could be a significant growth driver this year as they may be popular places for people to visit amid reopenings. The early numbers look promising, with Disney reporting $21.8 billion in revenue for the quarter ended Jan. 1, which represented a year-over-year increase of 34%. The big catalyst behind that was its parks, experiences, and products segment, which doubled to $7.2 billion -- and that wasn't even during the peak travel season.
Disney is a top growth stock to own. With its shares down 11% this year and around their 52-week lows, now can be a great time for all investors, new and old, to add this stock to their portfolios.
