The S&P 500 (^GSPC) is packed with companies that have built dominant market positions, making it a core index for investors. A select few continue to innovate and expand, setting themselves up for long-term success.
Not every big company is a great investment, and we’re here to help you find the best opportunities. Keeping that in mind, here are three S&P 500 stocks that could deliver good returns.
Leidos (LDOS)
Market Cap: $20 billion
Formed through the split of IT services company SAIC, Leidos (NYSE: LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.
Why Do We Like LDOS?
- Sales pipeline is in good shape as its backlog averaged 20.2% growth over the past two years
- Operating margin improvement of 3.9 percentage points over the last five years demonstrates its ability to scale efficiently
- Share buybacks catapulted its annual earnings per share growth to 28.2%, which outperformed its revenue gains over the last two years
At $159.15 per share, Leidos trades at 12.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
W. R. Berkley (WRB)
Market Cap: $24.71 billion
Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE: WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.
Why Is WRB Interesting?
- Net premiums earned expanded by 12.4% annually over the last five years, demonstrating exceptional market penetration this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 33% to outpace its revenue gains
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
W. R. Berkley is trading at $65.82 per share, or 2.3x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.
Devon Energy (DVN)
Market Cap: $30.76 billion
With operations spanning from the oil-rich Delaware Basin to the Bakken formation of North Dakota, Devon Energy (NYSE: DVN) explores for and produces oil, natural gas, and natural gas liquids from wells drilled across the United States.
Why Should You Buy DVN?
- Annual revenue growth of 27.8% over the past five years was outstanding, reflecting market share gains this cycle
- Unparalleled revenue scale of $17.02 billion gives it advantageous pricing and terms with suppliers
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Devon Energy’s stock price of $49.49 implies a valuation ratio of 10x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
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