3 Top U.S. Stocks to Watch in November 2022

Visa, Microsoft, and Lowe’s Companies are three top U.S. stocks to watch in November.

| More on:
A stock price graph showing growth over time

Image source: Getty Images.

Stocks, which have been impacted by higher interest rates, have entered the first non-COVID-induced bear market since the 2008-2009 financial crisis. What’s the good news? Investors are stockpiling capital. With a lot of cash sitting on the sidelines and markets expecting rates to peak in the first half of 2023, here are three top U.S. stocks to watch in November.

Visa

A surge in global travel demand is a rising tide that benefits companies like Visa (NYSE:V). Cross-border transactions earn the credit card company significantly more per swipe than domestic transactions. In the fiscal third quarter, cross-border volume increased 40% year-on-year. Despite the suspension of service in Russia and the strengthening of the U.S. dollar, which created some global headwinds, the surge in cross-border volume helped revenue increase 19% in the quarter to $7.9 billion. Revenue for the fiscal year totaled $29.3 billion, a 22% increase.

Visa is more than just a safe bet. It’s also become a promising dividend growth stock, recently increasing payouts by 20%. At $0.45, investors will now receive more than double the $0.195 paid by the company five years ago. During that time, it averaged an 18.2% CAGR (compound annual growth rate).

Despite the significant increase, the yield remains modest at less than 0.9%. Visa may not appear to be a bargain at 28 times earnings, but that is historically not a lofty valuation for Visa. The company commands a premium due to its status as a nearly insurmountable payments network encompassing more than 80 million merchant locations worldwide.

Microsoft

Microsoft (NASDAQ:MSFT) is an international tech giant and the world’s largest software company. It’s one of only three publicly traded companies worth at least $1 trillion. Many of its top products, such as its Windows operating system, Microsoft Office suite of productivity software, and even LinkedIn, which it acquired in 2016, are well-known to consumers. Behind the scenes, its Intelligent Cloud business is an important driver of growth, with revenue increasing 20% in the fiscal first quarter of 2023, a period when overall company revenue increased only 11%. 

While the PC slump may continue for a few more quarters, Microsoft’s diverse business generates recession-resistant cash flows that could be used for stock buybacks or a higher dividend. Microsoft has a long history of entrenched software products, and 24 times earnings isn’t a bad price to pay for a dominant company that analysts expect to grow at a double-digit rate for the foreseeable future.

Lowe’s

Of course, the Fed’s obstinate determination to raise interest rates has hurt more than just tech stocks. The housing market has also cooled as a result of the end of easy money policies, and real estate corollaries such as home improvement retail chains have felt the pinch. Given that backdrop, as well as the fact that booming 2021 demand makes year-over-year comparisons difficult, Lowe’s Companies (NYSE:LOW) has performed admirably this year.

Lowe’s Companies is the country’s second-largest home improvement retailer (after Home Depot). Total sales for the most recent quarter were $27.5 billion, compared to $27.6 billion in the same quarter a year ago. Net earnings remained flat in the most recent quarter compared to the previous year, while earnings per share increased 9.9%, aided by stock buybacks that reduced the share count.

Comparable sales growth and new store openings in North America will drive future growth. Rising costs are putting pressure on the bottom line, but Lowe’s can offset this with top-line growth. Lowe’s looks like a solid long-term stock to buy at 14 times earnings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Stephanie Bedard-Chateauneuf has positions in Microsoft Inc. The Motley Fool recommends Home Depot, Microsoft, and Visa. The Motley Fool has a disclosure policy.

More on Tech Stocks

Woman has an idea
Tech Stocks

The Smartest Stocks to Buy With $20 Right Now and Hold Forever

These under-$20 stocks have the potential to grow further with time and deliver solid capital gains.

Read more »

A worker uses a laptop inside a restaurant.
Tech Stocks

Why Investors Shouldn’t Give Up on Shopify Just Yet

Here's why long-term investors may not want to throw in the towel just yet on e-commerce juggernaut Shopify (TSX:SHOP).

Read more »

Various Canadian dollars in gray pants pocket
Tech Stocks

3 No-Brainer Stocks to Buy Right Now for Less Than $50

These no-brainer TSX stocks are poised to deliver solid capital gains in the medium to long term.

Read more »

money cash dividends
Tech Stocks

The Best TSX Stocks to Invest $5,000 in Right Now

These Canadian stocks have the potential to beat the broader market averages in the long term and generate solid capital…

Read more »

grow dividends
Tech Stocks

3 Monster Stocks to Buy Without Hesitation

Are you looking for great stocks to buy today? Here are three monster stocks you should buy without hesitation!

Read more »

telehealth stocks
Tech Stocks

WELL Health Stock Zoomed 15% After Earnings: Is it a Buy?

WELL Health stock is reporting record demand as revenue soars and guidance is increased once again.

Read more »

online shopping
Tech Stocks

Is it Time to Buy E-Commerce Stocks?

Are you curious about e-commerce stocks? Find out if I think it’s time to buy them!

Read more »

Growing plant shoots on coins
Tech Stocks

Is Now the Right Time to Buy Growth Stocks?

There are so many growth stocks that investors wish they'd bought back when they were down. Now, they're definitely down,…

Read more »