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Discussing undervalued retirement stocks normally brings defensive stocks to mind, especially those with high dividends and low exposure to market volatility. While defensive stocks are great to your retirement portfolio, you need to also add some growth potential, especially should you aren’t already a retiree.
Things have shifted on account of market volatility and up to date selloffs, and we now see tech stocks offering similar and even less value than the stocks of inelastic businesses. Meanwhile, investors have moved into many defensive stocks which still retain a premium valuation, and wouldn’t fit the theme of being undervalued retirement stocks.
With that in mind, investors should look into blue-chip and growth stocks for his or her retirement portfolios in February 2023. The next three offer tremendous upside potential as we go forward.
GE
General Electric
$80.83
BRK-B
Berkshire Hathaway
$307.33
PYPL
PayPal
$79.64
General Electric (GE)
Source: Sundry Photography / Shutterstock.com
Tesla (NASDAQ:TSLA) may need overshadowed all the normal auto-related corporations within the post-pandemic era, but things are beginning to turn a corner as competitors speed up their investments in electric and renewable technology.
A primary example, General Electric (NYSE:GE) remained neglected by Wall Street after its 2016 selloffs. Nevertheless, its 2022 fourth-quarter earnings display an revolutionary company with an up-and-coming segment that might revitalize the corporate. I’m talking about GE Aerospace. The segment grew its sales by 22% year-on-year to $26 billion, while profits increased by 66% to $4.8 billion. This led to GE Aerospace becoming the driving force of General Electric’s growth. The corporate also launched GE Healthcare this 12 months.
Moreover, General Electric expects its aerospace segment’s top line to grow “mid-to-high teens” and operating money flow to around $5.5 billion this 12 months. Each the corporate’s battery and engine businesses are also taking off, and with these growth metrics, the stock is about to trade higher. Thus, that is considered one of the undervalued retirement stocks on my watch list at once.
Berkshire Hathaway (BRK-B)
Source: IgorGolovniov / Shutterstock.com
Speaking of undervalued retirement stocks, Berkshire Hathaway (NYSE:BRK-B) is a must-buy, in my opinion. The Oracle of Omaha is arguably one of the best investor you may follow when crafting a long-term retirement portfolio. Accordingly, buying some Berkshire Hathaway stock is an awesome foundational place to begin when planning a retirement portfolio.
The corporate invests the vast majority of its funds in growth stocks and blue-chip stocks. By investing in BRK-B, you’re getting significant exposure to big-name corporations reminiscent of Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), and Chevron (NYSE:CVX). Furthermore, despite the stock market selloffs giving Berkshire a short-term hit to its financials, the corporate has a $109 billion money buffer. In times of trouble, that stash can turn out to be useful.
Overall, you’re getting significant exposure to most of the top corporations available in the market with adequate stability, while also increasing your portfolio’s diversification by investing on this one stock. In fact, financials aren’t one of the best within the short term. But because the stock market bounces back, it’s only a matter of time until Berkshire regains momentum.
PayPal (PYPL)
PayPal (NASDAQ:PYPL) is a household name that appears too undervalued at its current valuation. Like Meta Platforms (NASDAQ:META) and Netflix (NASDAQ:NFLX), Wall Street can even walk back its bearish view on PayPal once the corporate delivers strong growth. Despite short-term hiccups within the digital payments sector, there isn’t any doubt that digital payments are growing rapidly on account of the burgeoning freelance and e-commerce markets.
Furthermore, the digital payments market is well growing at a double-digit clip every year. Paypal’s dominance within the fintech sector through its “Family of Brands” which incorporates apps reminiscent of Venmo, Zettle, Xoom, and Honey makes it amongst the largest beneficiaries of this digital payments growth.
Paypal’s financials are also robust. Revenue growth is accelerating, and profits have sharply turned a corner in Q3 2022. As the corporate’s brisk growth continues and margins improve, PayPal will likely be far ahead of its pre-pandemic metrics. The one sluggish metric is its stock price, down 33.4% from February 2020, on the time of writing. Thus, PYPL stock is among the many top undervalued retirement stocks to purchase at once.
On the date of publication, Omor Ibne Ehsan didn’t have (either directly or not directly) any positions within the securities mentioned in this text. The opinions expressed in this text are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a author at InvestorPlace. He can also be an energetic contributor to quite a lot of finance and crypto-related web sites. He has a powerful background in economics and finance and is a self taught investor. You possibly can follow him on LinkedIn.
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