While the S&P 500 index is trailing the TSX year to date, the U.S. remains the world’s largest economy. Due to its vast size, most financial experts advise investors to buy and hold quality stocks south of the border, as it provides portfolio diversification, thereby reducing overall risk.
Yes, the stock market is extremely volatile right now due to multiple factors. But the current environment also allows investors to buy fundamentally strong stocks at a discount, with as little as $100.
If you are looking to invest in U.S. stocks, consider buying shares of companies such as Global-E Online (NASDAQ:GLBE), Green Thumb Industries (CNSX:GTII), and Kinder Morgan (NYSE:KMI) right now. Here’s why.
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An e-commerce company
Valued at a market cap of US$5.16 billion, Global-E enables its customers to increase cross-border sales by creating a localized experience for shoppers. It also aims to streamline the logistics process for customers and improve supply efficiencies.
Shares of Global-E are down 60% from all-time highs, but the company is forecast to increase sales by 70% to US$417 million in 2022 and by 46% to US$610 million in 2023.
Earlier this month, Global-E disclosed a partnership with Disney, where it will help the latter with D2C (direct-to-consumer) e-commerce strategies in the Asia-Pacific region. Disney has a global presence, and Global-E is poised to benefit immensely if the partnership expands to other geographies.
Additionally, Global-E ended 2021 with a net revenue retention rate of 152%, suggesting existing customers increased spending on the platform by 52% year over year.
Given consensus price target estimates, GLBE stock is currently trading at a discount of 30%.
A cannabis giant
The cannabis industry remains attractive for growth investors. Though marijuana is still illegal at the federal level in the U.S., several states have legalized it in recent years, opening up massive opportunities for multi-state operators such as Green Thumb Industries.
Green Thumb increased revenue by 15% year over year to US$254.3 million in the second quarter (Q2) and is on track to surpass US$1 billion in annual sales in the next year. One of the largest cannabis companies on the planet, Green Thumb is valued at a market cap of $4.2 billion.
Green Thumb has 77 retail locations and a pipeline of licences, which should allow the company to double its store count. Armed with a wide portfolio of products, including vapes, edibles, flowers, and topical products, Green Thumb has a broad spectrum of consumer brands.
A dividend-paying energy company
The final U.S. stock on my list is energy heavyweight Kinder Morgan. Due to an uptick in energy prices, Kinder Morgan expects to generate US$5 billion in distributable cash flow in 2022. Kinder Morgan is an attractive bet for income-seeking investors, as its dividend yield stands at a tasty 5.9%.
Given it pays investors an annual dividend of $1.11 per share, the company’s payout ratio will be below 55% this year. A low payout ratio allows Kinder Morgan to lower its debt, increase capital expenditures, and even buy back shares.
The midstream company recently approved a natural gas pipeline expansion project, which should drive cash flows and dividends higher in the future.
Kinder Morgan stock is trading at a discount of 10% compared to consensus price target estimates. After accounting for its dividend yield, total annual returns might be closer to 15%.
