How to Identify “Goldilocks Stocks” in Today’s Bullish Market

These “Goldilocks stocks” provide investors with the perfect scenario of stocks to buy as we head towards a stronger market.

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Investors are on the precipice of greatness these days. While we aren’t in a bull market yet, we are so close. And that makes it the perfect time to get in on some amazing stocks due to recover and rebound with massive returns.

In fact, one might call it “just right.”

That’s why today we’re going to look at the best “Goldilocks” stocks on the market. How to find them, where to find them, and some to consider.

What are “Goldilocks stocks”?

“Goldilocks stocks” refer to stocks that are perceived to be in a “just right” condition – neither too risky nor too conservative, balancing growth potential and stability. These stocks exhibit steady growth rather than explosive or volatile increases. They are often found in sectors with consistent demand and sustainable business models.

Goldilocks stocks are typically priced reasonably compared to their earnings and growth prospects. They aren’t overly expensive like some high-growth tech stocks, nor are they extremely undervalued, which could indicate underlying issues.

Companies classified as Goldilocks stocks generally have predictable and stable earnings. This consistency provides reassurance to investors looking for steady returns.These stocks offer a balance of risk and reward. They are not as risky as speculative stocks but still provide more growth potential than very conservative investments like blue-chip stocks or bonds.

The top Goldilocks stocks to buy

When considering Goldilocks stocks then, there are a few that come right to mind. These would be ones in the consumer staples, healthcare, and utilities sectors. With that in mind, here are three investors will want to consider.

First we have Metro (TSX:MRU), a major food retailer in Canada with a consistent revenue stream due to its large network of grocery stores and pharmacies. The company has shown steady growth in earnings and revenues, driven by strategic acquisitions and expansion. Metro often trades at a reasonable price-to-earnings (P/E) ratio compared to its industry peers, making it a balanced investment. It also holds a 1.84% dividend yield as of writing.

Then we have Bausch Health Companies (TSX:BHC). Bausch Health is a diversified healthcare company with a strong portfolio of pharmaceutical products, medical devices, and over-the-counter products, ensuring stable demand. The company has a robust pipeline of new products and ongoing global expansion efforts that contribute to its growth prospects. Bausch Health has been working on reducing its debt and improving its financial health, making it a more stable investment.

Finally, Fortis (TSX:FTS) also looks like an excellent buy. Fortis stock is a leading North American utility company with a diversified portfolio of regulated utilities, providing stable and predictable earnings. The company has a 50-year history of paying and increasing dividends, making it attractive for income-focused investors. As a utility, Fortis operates in a regulated environment, which reduces its business risk and ensures steady cash flow.

Bottom line

If you’re looking for Goldilocks stocks, each of these provide investors with a strong growth opportunity. Couple that with dividends, and you’re in for a portfolio that’s going to be “just right.”

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

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