Since early April, the market has had a bit of a resurgence. Investor confidence seems to be growing thanks to tariff relief, which supports an optimistic view of the economic backdrop. This confidence might be encouraging you to put some money to work.
While it can always be a challenge to find attractive investment ideas, it's always important to focus on key variables that matter, particularly those that relate both to the quality of the business and the valuation.
With that being said, here are my two favorite stocks to buy right now.
Image source: Getty Images.
Smooth sailing
It has been impressive watching the comeback of Carnival (CCL -0.42%) (NYSE: CUK). The cruise line was decimated during the pandemic, as operations were halted, but it has faced robust demand in recent times.
In the latest fiscal quarter (Q1 2025 ended Feb. 28), revenue reached a record of $5.8 billion. And the leadership team mentioned that customer deposits also hit a first-quarter all-time high of $7.3 billion. This points to strong demand in the near term.
With demand and revenue hitting their stride, Carnival is dramatically growing its bottom line. Operating income nearly doubled year over year to $543 million, which was a record. The business raised guidance, with expected adjusted net income to jump 30% in fiscal 2025.
Hotels and airlines are calling out tougher times ahead. That's due to the possibility of more tempered consumer spending. However, Carnival is bucking this negative trend, which highlights the potential value proposition that it provides to customers compared to alternative options.
That's not to say that Carnival would be immune in a recession. It's just encouraging to see the momentum not letting up.
It's important not to ignore Carnival's debt load, which stood at $27 billion at the end of Q1. However, management has prioritized paying this down, as the balance has decreased from almost $35 billion about two years ago. The business just refinanced $5.5 billion of debt. And it helps that Carnival's earnings are rising to continue paying interest.
The current valuation might already reflect this risk. As of this writing, shares trade at a forward price-to-earnings (P/E) ratio of just 12.4. If the company keeps reporting solid financial results, it won't be surprising to see that multiple expand in the years ahead.
Entertaining the world
The past five years have not been fun for shareholders of Walt Disney (DIS 0.18%). The stock has produced a total return of -3% in that time, a disappointing result. The market's general pessimism has been understandable, as Disney has been trying to navigate the changing media landscape that is hurting its legacy cable networks. At the same time, the company was struggling to reach profitability within its direct-to-consumer (DTC) streaming division.
Things are looking drastically better these days. In Q2 2025 (ended March 29), Disney beat Wall Street revenue and adjusted earnings per share estimates. This was driven by the DTC segment reporting another quarter of positive operating income.
A combination of pricing power, new subscribers, and expense controls are helping. Management expects operating income from streaming to total $1 billion in fiscal 2025, something the naysayers probably didn't think was possible.
Don't forget about Disney's Experiences segment, which includes its lucrative theme parks, cruises, and consumer products. Because the business possesses so much invaluable intellectual property, it's no wonder executives are focused on growth. In September 2023, it was announced that Disney would spend $60 billion on capital expenditures over the next decade to enhance its theme parks and expand its cruise fleet to meet what they believe is untapped demand across the world.
The stock has been volatile in the past couple of years. But investors can scoop up shares today at a forward P/E ratio of 19.4. That's certainly not as cheap as the 14.1 multiple from less than two months ago. However, Disney shares are still at a discount to the broader market. It's a good idea to consider adding this business to your portfolio right now.
