By Philip van Doorn
(This is the first in a three-part series listing highly rated stocks that sell-side analysts expect to rise the most over the next 12 months. Part 2 covers small-cap stocks and Part 3 covers mid-caps.)
The stock market always looks ahead. Why else would the S&P 500 Index have returned 15% for 2020 as of Dec. 11 even as COVID-19 cases are setting daily records?
Below is a list of the 20 stocks in the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.75% that are rated “buy” by at least three of four analysts that are expected to rise the most over the next year. Following that list is a summary of analysts’ opinions about the 30 components of the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.09% .
Investors have been pouring money into stocks, in part, because they don’t wish to be left behind when (and if) vaccines lead to a decline in coronavirus infections and a return to a normal economic growth path.
Incredibly low interest rates have also helped push investors to U.S. stocks. The S&P 500 has a weighted aggregate dividend yield of 1.57%, which compares favorably to a yield of only 0.91% for 10-year U.S. Treasury notes /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +3.87% .
Among the S&P 500, 253 stocks have majority “buy” or equivalent ratings among analysts polled by FactSet, and 96 are recommended by at least 75% of analysts.
In case you are wondering, two of this year’s highest-flying stocks aren’t included in the S&P 500. They have also run way ahead of analysts’ price targets:
Here are the 20 S&P 500 stocks with at least 75% “buy” ratings with the most upside potential over the next 12 months implied by analysts’ consensus price targets:
Scroll the table to see all of the data.
It might surprise you to see General Motors Co. /zigman2/quotes/205226835/composite GM +0.54% on the list, but the company is making a tremendous push to release 30 all-electric vehicles by 2025. GM was included on this list of 20 electric-vehicle stocks besides Tesla and Nio that analysts expect to rise the most over the next year .
You might also be surprised to see these tech high-fliers expected to continue their outperformance next year:
The Dow Jones Industrial Average returned 10.3% for 2020 through Dec. 11. Here are the 30 components of the Dow sorted by how well analysts expect the stocks to perform over the next 12 months:
This table includes a full ratings breakdown. Again, you will need to scroll to see all the data.