Kiplinger's annual investing outlook, which includes the best stocks to buy, has been a feature for our readers since 2012. As executive editor for Kiplinger's Personal Finance Magazine, I have authored the piece since then, surveying the stock market and economy and synthesizing my findings into key takeaways.
That's no small task, given the broad and dynamic nature of the market. Along with conducting plenty of research, I rely on my experience to draw out the most important trends and likely winners for the best stocks to buy. I've covered this story for over a decade now, but I've been an investing writer for far longer. I've seen investors through a lot of bull markets and bear markets.
How you can choose the best stocks to buy
We anticipate another positive year for stocks. The U.S. should continue to lead global markets, with corporate earnings continuing to grow and, better yet, broaden, supporting a rally that spreads beyond the so-called Magnificent Seven tech giants to the other 493 stocks in the S&P 500 and to other overlooked corners of the market.
Acknowledging the many risks – including lofty valuations and geopolitics in the form of an ongoing war in Ukraine and escalating conflict in the Middle East – and the likelihood of a market correction at some point along the way, we caution investors to be selective and to keep portfolios diversified, rebalancing periodically to ensure they stay that way.
When investors are attempting to find the best stocks to buy now, they should look beyond factors such as company size (small-cap and large-cap stocks, for instance) or investing style (such as growth or value) and search for stocks of companies with consistent profits, good cash flow and other indicators that reflect quality.
"If a company generates more cash than it needs to run its business, it can do a number of useful things with it, such as pay dividends, buy back its stock, acquire other companies, expand its business and knock out its debts," writes Kiplinger contributor Will Ashworth on the importance of good cash flow.
While Kiplinger's outlook provides context and advice related to general market trends, it's important for individual investors to consider their own risk tolerance and time horizon when deciding what works best for them and their financial goals.
With that in mind, here are seven of the best stocks to buy now.
When assembling this list of Kiplinger's best stocks to buy, we sought out high-quality companies that boast solid fundamentals such as strong earnings and revenue growth, as well as free cash flow, which is the money left over after operating expenses and spending on assets. Additionally, many of the names featured here can be considered some of the best value stocks as measured by their forward price-to-earnings (P/E) ratios.
The names on our list of the best stocks to buy vary by size and industry and are not meant to make up a diversified portfolio. But all, for one reason or another, are well positioned to benefit over the next 12 months.
- Sector: Healthcare
- Market value: $63.6 billion
- Dividend yield: 1.9%
Becton, Dickinson (BDX) makes single-use surgical products that are replaced regularly. Morningstar analyst Alex Morozov says 85% of the company's revenue is recurring – think of the old analogy of blades providing the ongoing revenue stream for razor manufacturers. Becton, says Morozov, is "a $40 billion-plus business of different blades."
That diversity has helped. While medical-device peers saw declines in their businesses over the past year, Becton's was stable, albeit flat. At current prices a share, the healthcare stock trades at 15 times 2025 expected earnings – a discount to its historic price-earnings ratio and compared with its peers. Analysts expect a 9.4% increase in 2025 earnings over 2024 levels. The shares yield 1.9%.
- Sector: Financials
- Market value: $117.9 billion
- Dividend yield: N/A
Fiserv (FI) provides information-management and e-commerce systems for the financial services industry. Shares have risen roughly 56% in 2024 through mid-December, but a bullish following on Wall Street sees continued upward momentum for one of the best stocks to buy.
FI trades at 20 times expected 2025 earnings per share – a discount to competitors, notes analyst Stephen Biggar at Argus Research. It deserves a premium P/E ratio over peers, he says, "given its consistent double-digit earnings per share growth, operating-margin expansion and record of product innovation." Biggar's 12-month price target for the Buy-rated financial stock is $223, implying a 10% gain.
- Sector: Financials
- Market value: $188.3 billion
- Dividend yield: 2.0%
Investment banks did well in 2024, but 2025 "will be even better," says Jay Hatfield, manager of InfraCap Equity Income Fund ETF, thanks in part to an expected increase in initial public offerings (IPOs). But Goldman Sachs (GS) has other pluses: Its growing wealth management business pulled in record fees in 2024; assets rose to a new high of $3 trillion. Robust results have pushed the shares up 74% over the past 12 months.
Even so, the blue chip stock trades at 12 times 2025 expected earnings, in line with its five-year average. Analysts expect annual earnings growth of 15% in 2025, and the stock yields 2.0%.
- Sector: Consumer staples
- Market value: $43.8 billion
- Dividend yield: 3.6%
Spun off from Johnson & Johnson in 2023, Kenvue's (KVUE) brands include Band-Aid, Tylenol, Neutrogena and more. The consumer staples stock trades at just 18 times expected 2025 profits, "mispriced for the portfolio they have," says T. Rowe Price Value fund manager Ryan Hedrick.
"There's an opportunity to improve growth, particularly in skin care," he says, noting that Kenvue's beauty line should benefit from being out of the shadow of a big pharmaceutical firm. He sees revenue growth of 3% to 4% a year and earnings growth of 6% to 8%.
The stock yields 3.6%. "There's reason to believe this stock will be a better version of itself over time," says Hedrick.
- Sector: Technology
- Market value: $98.6 billion
- Dividend yield: 1.2%
Shares in Lam Research (LRCX), which makes semiconductor manufacturing equipment, are down 30% from their high in July, due to concerns that the U.S. might curb exports on chip technology and worries stemming from poor results from a big competitor. The pullback provides a nice entry point for investors seeking out the best stocks to buy.
"Artificial intelligence will continue to fuel demand for semiconductors, and everything is becoming more and more digital," says John Buchanan, editor of The Prudent Speculator.
Analysts expect 19% earnings growth in both 2025 and 2026. And one of Wall Street's best stocks to buy trades at 21 times expected 2025 profits – a discount to the typical maker of semiconductor wafer fabrication equipment.
- Sector: Communication services
- Market value: $100.8 billion
- Dividend yield: N/A
Spotify Technology (SPOT), a leading DJ of America's playlists, is spinning into profitability in 2025. The independent music streamer is a "top pick" from Morgan Stanley Research.
The stock price has more than doubled in 2024 (through mid-December) as the company flexed in big ways: raising prices after years of holding them effectively flat; realizing savings after a headcount reduction in 2023; and unlocking earning power by launching audiobooks and offering a bundled service.
Morgan analysts see earnings of $5.10 a share in 2024 and $7.70 in 2025, compared with a loss of $2.73 in 2023. Their 12- to 18-month price target for the stock is $430, implying an 11% gain.
- Sector: Industrials
- Market value: $50.2 billion
- Dividend yield: 0.1%
Vertiv Holdings (VRT) is an industrial firm specializing in digital infrastructure and makes components such as coolers needed to keep big data centers and AI computers operating. Vertiv's cooling systems, which pipe liquids into plates or tanks surrounding computers, are more effective than systems that just blow cold air, using less electricity and allowing computers to be packed more densely together, says Jefferies analyst Saree Boroditsky.
That advantage, plus a new partnership with Nvidia (NVDA), could push revenues for one of Wall Street's best stocks to buy up from an expected $7.7 billion in 2024 to $10 billion in 2025, she says, while 2025 profits jump 30%-plus.
Vertiv shares aren't cheap. They soared in 2024 and trade at 37 times expected 2025 earnings. Boroditsky's 12-month target for the stock is $145.
Note: These stock picks first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
