There’s a bit of an issue for investors seeking out stocks these days. Economists have been warning about a recession in the United States, even as markets rebound in light of lowering inflation. So, what on earth are investors supposed to do — especially if they’re interested in exposure through U.S. stocks?
First off, don’t give up on U.S. stocks just because a recession is potentially on the way. In fact, now could be a great time to find strong companies that offer dividends at a cheap price. This could help you through any market downturn and see your shares soar out the other side.
And if you’re interested, these are the three top U.S. stocks I would seek out.
Steel Dynamics (NASDAQ:STLD) is a strong option for those seeking both income and strong share growth in a rebounding market. The company is within the burgeoning materials sector among U.S. stocks, offering investors access to diversified domestic steel as well as being a metals recycler. It offers you cash flow based on an area of the market that simply doesn’t dwindle, even in the face of a recession.
Steel Dynamics stock offers major value as of writing, trading at just 3.62 times earnings, plus a 1.66% dividend yield. Furthermore, shares continue to climb, up 32% year to date. But it’s also a strong long-term hold, with shares up 683% in the last decade for a compound annual growth rate (CAGR) of 23% as of writing among U.S. stocks.
British-based Rio Tinto Group (NYSE:RIO) is another strong option within the materials sector, especially with copper seeking such high demand. This product is needed for everything, especially in a clean energy future. So, it’s far different than investing in gold stocks that will simply fall back after a recession subsides.
And Rio stock is one of the best options among U.S. stocks out there, as it continues to expand both organically and through acquisition. Plus, it has an insanely dividend yield at 11.63% as of writing! Furthermore, you can lock that in while it trades at a highly valued 5.46 times earnings. Shares of Rio stock are down slightly by 1.5% year to date but have fallen sharply from 52-week highs. Over time, however, shares are up 149% in the last decade for a CAGR of 9.52% as of writing.
Finally, for those seeking some stable income from their U.S. stocks that falls in between these two options, consider Realty Income (NYSE:O). The company has a large portfolio of high-quality real estate offering both income and growth to investors. It provides long-term leases coupled with strong earnings and has increased its dividend each year for the last 27 consecutive years.
Realty stock has a dividend of 4.07%, which is great. However, it’s not cheap. The company currently trades at 73 times earnings among U.S. stocks. But it’s clear that investors are seeking out the stock to battle back inflation, rising interest rates, and keep it somewhere safe. Shares are up 3.5% year to date, which is great. But shares are up even higher at 179% in the last decade. That’s a CAGR of 10.8%.