If you say there's not much to like about a bear market, you're right. Last year, all three indexes touched bear territory. And many of us felt the impact on our portfolios.
But there actually are two things to like about these sorts of markets: First, they always lead to bull markets. So, we know these tough times are only temporary. Second, bear markets make great moments to bargain hunt.
Today is no exception. The turbulent market has left many quality companies trading for very interesting prices. That offers us the opportunity to scoop them up for a deal -- then sit back and wait for gains, and often dividend payments, to grow our portfolios over time.
Looking for some examples? Here are two top stocks to buy for a bargain now.
1. Johnson & Johnson
We all know Johnson & Johnson (JNJ 1.55%) for the products that populate our medicine cabinets -- like the company's famous Band-Aid brand bandages. But these sorts of products don't actually drive growth at J&J. And that's why the company's decision to spin off the consumer health business into a separate entity is a good one. This is happening now, with the launch of Kenvue.
The spinoff means J&J can focus all of its resources on its higher-growth businesses of pharmaceuticals and medtech. Revenue at each of these climbed more than 6% last year. And moves J&J is making now should lift growth over time. For example, J&J recently bought heart pump specialist Abiomed -- that gives medtech 12 platforms bringing in more than $1 billion annually.
As for pharmaceuticals, J&J's pipeline includes more than 100 candidates. And the company expects current drugs and new launches to help the pharmaceutical business reach as much as $60 billion in sales in 2025. That represents a 15% increase from last year. This is even as J&J's blockbuster immunology drug Stelara begins to face competition.
Meanwhile, you can also count on J&J for passive income. It's a Dividend King, known for its track record of dividend increases. It pays investors $4.76 annually per share, at a yield of 3.01%. Today, J&J trading for 14 times forward earnings estimates, down from 18 last year, looks pretty cheap for all it has to offer.
2. Procter & Gamble
Procter & Gamble (PG 0.61%) is another Dividend King -- in fact, the company recently increased its dividend for the 67th straight year. P&G pays investors $3.76 a share annually, representing a yield of 2.61%.
Now, let's turn to earnings. Higher costs and negative foreign exchange impact represent significant headwinds for the company. In fact, chief executive officer Jon Moeller says this "continues to be a very difficult cost and operating environment." Yet, in spite of the headwinds, the maker of Tide laundry detergent and Pampers diapers was able to grow revenue.
In the most recent quarter, the consumer goods giant reported a 4% increase in net sales and a 3% gain in core earnings per share (EPS). If we remove currency impact, core EPS climbed 13%.
Importantly, growth wasn't just in one area. Every one of P&G's 10 product categories grew sales on an organic basis. And six out of seven regions increased organic sales too.
Volumes sold have slipped -- and this is due to higher prices and the fact that consumers have become more careful about their spending. This means some may buy less or favor less expensive brands.
Still, P&G has managed to grow through these difficult times. And, though it does face competition from cheaper products, P&G still sells many necessities. This works in its favor during tough economic times.
Right now, the stock trades for 24 times forward earnings estimates, down from more than 28 last year. Considering P&G's dividend growth and its strength even when facing headwinds, the stock looks like a bargain right now -- and one you'll want to hold on to for the long haul.