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7 Top-Performing S&P 500 Stocks to Watch

The stock market can be a confusing place to navigate these days. Usually, it is volatile and has inevitable ups and downs. But we are living in an age…

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This article was originally published by Investor Place

The stock market can be a confusing place to navigate these days. Usually, it is volatile and has inevitable ups and downs. But we are living in an age of pandemics and hyper-growth stocks. Some of the valuations are mind-boggling, to say the least. In such an environment, finding consistent performers becomes a very difficult task. Luckily, you can always refer to the top performers of the S&P 500 and see if there are any that you like enough to invest your money.

Although it might sound like a boring strategy, picking tried-and-tested performers is a sure-shot way of fireproofing your portfolio. Yes, you might miss out on the odd growth stock. But you will rest easy knowing you have invested in a safe, mature investment. S&P 500 stocks offer great returns over the long term. And you must remember, to get to the S&P 500, a company must satisfy stringent criteria.

Just as a refresher, a company should be a U.S. company, have a market capitalization of at least $13.8 billion, be highly liquid, and have a public float of at least 10% of its shares outstanding. Also its most recent quarter’s earnings and the sum of its trailing four consecutive quarters’ earnings must be positive.

Understandably, for a company to attain this kind of credibility and volume is not easy. If a company has managed to gain that kind of volume, you can rest easy when investing in the stock, such as these:

  • Nvidia (NASDAQ:NVDA)
  • PayPal (NASDAQ:PYPL)
  • Carrier Global (NYSE:CARR)
  • ServiceNow (NYSE:NOW)
  • Newmont (NYSE:NEM)
  • West Pharmaceutical Services (NYSE:WST)
  • NortonLifeLock (NASDAQ:NLOK)

Top-Performing S&P 500 Stocks: Nvidia (NVDA)

Source: JHVEPhoto / Shutterstock.com

Artificial intelligence computing leader Nvidia continues to be one of the most consistent tech stocks out there. Shares of the semiconductor company are up an astounding 1,333% in the last year. Clearly, the company cannot put a foot wrong.

Much of the success is connected to solid earnings performance. During the last five years, the company has grown the bottom line and the top line by 48.8% and 32.1%, respectively. But the last year was absolutely amazing for the Santa Clara, California-based firm. For fiscal 2021, revenue was a record $16.68 billion, a jump of 53% from $10.92 billion in the year-ago period.

Much of the credit has to go to the pandemic. Nvidia shares shot up exponentially during the health crisis, making it the best performing stock in the S&P 500 index and surpassing Intel (NASDAQ:INTC) as the largest U.S. semiconductor company by value.

Intel faltered with the development of its newest chips, and Nvidia picked up the spoils. The company is enjoying investor favor because its chips are in hot demand as people turn toward video games en masse for distraction while stuck at home. Let’s also not forget Nvidia and Advanced Micro Devices (NASDAQ:AMD) are the two most prominent players in the semiconductors space.

Because we are in the middle of an ongoing shortage of semiconductors in the U.S., these companies are very important to the working of several industries. In the eyes of analysts, the only thing these companies need to worry about is their supply chain. If Nvidia manages to take care of this area, I do not foresee any hiccups for the company.

PayPal (PYPL)

PayPal stockSource: Michael Vi / Shutterstock.com

Due to the coronavirus-driven turn to online shopping and digital transactions, PayPal saw record levels of payment volumes last year. In 2020, PayPal’s total payment volume or TPV grew by around one-third year-on-year.

In the second quarter of 2021, PayPal’s net payment volume amounted to around $311 billion, representing a 41% year-on-year growth, generated through more than 3.74 billion transactions that PayPal processed during that period.

Considering these numbers, Paypal shows no signs of slowing down on account of a post-Covid-19 economy. The payment processor expects an addition of about 50 million active users in 2021 and forecasts annual revenue of about $25.5 billion, well above the $21.4 billion estimated by analysts.

“At the beginning of the pandemic, consumers amid lockdown had no choice but to do all of their shopping online,” Chief Executive Officer Dan Schulman said.

“Today, the vast majority of consumers state that post pandemic, they will continue to shop online at their current elevated levels because it is more convenient, easier and saves time,” Schulman added.

Top-Performing S&P 500 Stocks: Carrier Global (CARR)

Carrier Sign outside of Carrier Commercial Service office Mississauga, Ontario, CanadaSource: JHVEPhoto / Shutterstock.com

Despite its reputation as a stay-at-home play, multinational home appliances manufacturer Carrier Global is doing surprisingly well this year. Shares have a one-year return of 92.6%, and the company has delivered earnings beats in its last two quarters.

Carrier Global produced $17.5 billion in sales in 2020, a fall of 6% from the year-ago period. Its net income declined to $2 billion from $2.16 billion. However, in the fourth quarter sales were up 2%. Meanwhile, the company reduced net debt to $7.9 billion from $10 billion. It also spent $400 million on R&D investments last year and added 120 new products.

Carrier Global is also a green play. Building owners are starting to invest in better ventilation as part of sustainable initiatives. Taking advantage of this trend, Carrier Global is encouraging building owners to retrofit heating, ventilation, and air conditioning (HVAC) systems and is pursuing mergers and acquisitions in the HVAC space.

ServiceNow (NOW)

Source: Shutterstock

Silicon Valley-based ServiceNow is a cloud‑based platform offering digital workflow services and solutions for employees and enterprises. The large-cap SaaS company has been a Wall Street darling for several years now; it has a five-year return of 760.4%.

In its most recent quarter, the workflow software provider reported net income of $59 million, or 29 cents a share, compared with $41 million, or 20 cents a share, in the year-ago period.

Adjusted for stock-based compensation, depreciation, and amortization, and other costs, earnings were $1.42 a share. Revenue rose to $1.4 billion from $1.1 billion in the year-ago quarter.  Subscription revenues improved 31% to $1.33 billion, while professional services and other revenues grew 41% to $79 million.

ServiceNow also deserves credit for improving its partner base. During the reported quarter, ServiceNow inked an agreement with Microsoft’s (NASDAQ:MSFT) new Windows 365 solution to let users easily access Cloud PCs directly through Microsoft Teams.

Considering all of these positive developments, it should be no surprise that the company is doing so well. In fact, things are expected to get even better. For the fiscal third quarter, non-GAAP subscription billings are forecasted between $1.32 billion and $1.325 billion, representing a jump of 23% year over year.

Top-Performing S&P 500 Stocks: Newmont (NEM)

Newmont (NEM) logo on a mobile phone screenSource: Piotr Swat/Shutterstock

Incorporated in 1921, Newmont is the world’s largest gold mining company. Based in Greenwood Village, Colorado, the company has mines in Argentina, Australia, Canada, Dominican Republic, Ghana, Mexico, Peru, Suriname, and the U.S.

Gold stocks are often seen as an effective hedge against inflation. That’s why NEM has done well this year. Recently, shares corrected from a 52-week high of $75.31 to current levels between $56 and $57 a pop. You can blame this on the recent dip in gold prices. A U.S. recovery and the threat of the Federal Reserve to raise interest rates is leading to bearish sentiment.

But real interest rates will remain negative for a long time, so investing in gold is never a bad option. And because Newmont is a bellwether of the industry, the investment decision is relatively straightforward.

The gold miner recently delivered another stellar quarter, with $1.6 billion in adjusted EBITDA and $578 million in free cash flow. Newmont produced 1.4 million attributable ounces of gold and 303 thousand attributable gold equivalent ounces from co-products. Looking ahead, Newmont’s has guided for stable production of more than 6 million ounces and improving costs from 2021 through 2024.

West Pharmaceutical Services (WST)

The West Pharmaceutical Services (WST) logo is displayed on a smartphone screen.Source: rafapress / Shutterstock.com

Founded in 1923 by Herman O. West and J.R. Wike of Philadelphia, West Pharmaceutical Services designs and manufactures the rubber stops used in vaccine packaging, vials, and pre-filled syringes, among other products. Much like several other pharmaceutical stocks, the pandemic was a tremendous tailwind for the company.

West Pharmaceutical, in its fiscal year 2020, generated more than $2.15 billion in sales. The Exton, Pennsylvania-based company, posted healthy sales and earnings growth in the latest quarter second quarter. Due to high demand, the medical company logged second-quarter earnings of $2.47 a share, a substantial uptick from $1.21 a share in 2020’s second quarter. Net income came in at $187.3 million, up from $91.2 million in the year-ago period.

As governments scramble to contain the virus, West Pharmaceutical will continue to do well. With the delta variant, we now know that booster shots will be in our future. All of that will translate into higher revenues for this one, ensuring its place on the list of top-performing S&P 500 stocks.

Top-Performing S&P 500 Stocks: NortonLifeLock (NLOK)

a smartphone running NortonLifeLock (NLOK) softwareSource: rafapress / Shutterstock.com

NortonLifeLock provides cybersecurity software and services. A Fortune 500 company and a member of the S&P 500 stock-market index, the software company is in the news recently because it is acquiring rival Avast in a cash and stock deal, valuing Avast between $8.6 billion and $9.2 billion, depending on the election of Avast stockholders.

NLOK will raise approximately $5.4 billion of new debt to finance the deal. Investors will have to watch this area closely. However, markets are viewing this deal favorably because NLOK will have well over 500 million total users and approximately 40 million direct customers once the acquisition closes.

Avast is a listed Czech-based cybersecurity company with more than 435 million users and 16.7 million paying subscribers. Its seven top markets are the U.S., the U.K., France, Germany, Canada, Brazil and Russia. Although the increased debt is certainly a concern, positive FCF generation should allow the company to decrease leverage significantly post-merger close.

Furthermore, the acquisition will allow the company to increase in size and expand its geographic footprint. With all this in mind, it’s not surprising that the company is on this list of top-performing S&P 500 stocks.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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Bryah nabs strategic exploration ground around namesake project

Special Report: Bryah Resources has expanded its footprint in WA, securing three exploration licences covering 50 km2 around its existing … Read More
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Bryah Resources has expanded its footprint in WA, securing three exploration licences covering 50 km2 around its existing land holding in the Bryah and Padbury Basins.

The Bryah Basin hosts the high-grade copper-gold mines at DeGrussa, discovered by Sandfire Resources (ASX:SFR) in 2009, and at Horseshoe Lights, which was mined until 1994.

It also hosts several historical and current manganese mines including the company’s Horseshoe South mine.

Bryah Resources’ (ASX:BYH) is confident that the new tenements – E52/3848, E52/3898 and E52/3963 – cover prospective and under-explored areas which have gold, copper-gold and manganese exploration potential.

The tenements were acquired for 4 million ordinary shares at an issue price of $0.055/share.

Tenure right next to historic gold mine

The largest tenement (E52/3898) covers exploration ground adjacent to the historic Wilthorpe shallow open cut gold mine.

The mine straddles the boundary of new tenement E52/3898 and an adjacent E52/2059, held by Westgold Resources (ASX:WGX).

It was mined by Dominion Mining from 1993-94, producing 4,650 ounces of gold from 72,817 tonnes of ore grading 2.0 g/t gold.

And there has been limited gold exploration since.

Based on the reported mineral occurrences, Bryah considers the tenement package highly prospective for copper, gold, and manganese.

Pic: Tenement location plan

Exploration planning underway

The company will shortly commence a thorough desktop review of all historical exploration reports as well as its own extensive database.

The data review will support a detailed phase of exploration planning, ahead of ground exploration activities.

In the meantime, reverse circulation drilling is underway at Bryah’s manganese JV, in a 2000m program fully funded by partner OM Holdings.

 


 

 

This article was developed in collaboration with Bryah Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

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Mining battery metals from the sea floor – could it soon be a low-impact reality?

Low-impact sea mining could become a reality for one ambitious company with the arrival of a 228m ship in Rotterdam … Read More
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Low-impact sea floor mining could finally become a reality for one ambitious company with the arrival of a 228-metre ship in Rotterdam earlier this week, heralding a critical milestone in its plans to become a producer of battery metals sourced from the deep ocean.

Named the Hidden Gem, the vessel is the key to The Metal Company’s (NASDAQ:TMC) vision of developing the world’s largest source of battery metals from the ocean floor with commercial production plans targeted for 2024.

TMC’s strategic partner, Allseas, will be converting a former deep-sea drilling vessel into a subsea mining vessel, retrofitting the ship with equipment to gather polymetallic nodules on the seafloor within contract areas held by TMC in the Pacific Ocean’s Clarion Clipperton Zone (CCZ).

The Hidden Gem. Pic: Business Wire

These potato-sized polymetallic nodules contain high grades of critical minerals such as nickel, manganese, copper and cobalt, which are integral to the manufacturing of electric vehicle batteries and other renewable energy technologies.
 

Enough to power 250 million EVs

Back in April 2020, TMC acquired its third seabed contract area to explore for polymetallic nodules from Tonga Offshore Mining Limited (TOML), which opened it up to a further 74,713km square block of exploration rights.

The third contract area comprises an inferred resource of 756 wet tonnes of polymetallic nodules, meaning its expanded footprint now contains enough nickel, copper, cobalt and manganese to build more than 250 million electric vehicle batteries.

Speaking to the TOML acquisition, TMC’s chairman and CEO Gerard Barron said the project will enable The Metal Company to bring more critical minerals to market to break through the bottleneck and shift away from fossil fuels.

“Our research shows that ocean polymetallic nodules can provide society with these metals at a fraction of the environmental and social impacts associated with land-based extraction.”

Pic: Supplied

 

Environmental concerns about sea floor mining

The environmental concerns which surround mining of the ocean’s floors are well documented, with several jurisdictions and regulatory bodies imposing bans and strict regulations on subsea mining due to the lack of understanding around the environmental impacts and growing fears about the irreversible effects these practices may have on the fragile ecosystems that we know very little about.

Many scientists believe that far more resources have been spent researching ways to mine the ocean floor rather than studying the impact this type of mining might have on the underwater environment.

TMC, however, believes that the Hidden Gem subsea vessel, which will deploy a 4.5km riser to collect the nodules off the seafloor without drilling, blasting or digging, can avoid much of the environmental disturbance associated with traditional sea floor mining methods.
 

Past failures

Planning to mine the oceanic crust’s wealth of mineral resources is a well-trodden path that’s seen many companies fail to deliver on their promises of production due to regulatory and financial hurdles.

Companies such as Nautilius and its high-grade Solwara 1 copper-gold project off the PNG coast is one recent example.

Nautilius had plans to turn its Solwara 1 project into the world’s first underwater copper-gold mining operation but wound up delisting from the TSX and going bankrupt in 2019.

The Canadian company had developed three undersea robots to mine hydrothermal vents on the ocean floor before funding issues became a problem midway through construction.
 

On the road to meeting deep-sea battery metals goal

There are examples of successful mining ventures in the ocean such as in Indonesia’s tin industry, diamond extraction in Namibia, and gold mining off Alaska’s coast, however these ventures are often heavily scrutinised by environmental lobby groups and constantly face the risk of being shut down due to increasing global environmental awareness and a trend towards greener policies from the governments who licence them.

While there is still plenty of obstacles and work to be done, TMC, with the help of Allseas and their new vessel, which is expected to be the first ship classified as a sub-sea mining vessel under American Bureau of Shipping, are much closer than many of their peers to realising the goal of supplying the market with battery metals from the seafloor.

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Pilbara Minerals’ Ken Brinsden on that record-breaking lithium auction and why high pricing is ‘expected to persist’

Pilbara Minerals sold an 8,000t spodumene cargo on the spot market for a record $US2,240/t. Where do prices go from here? … Read More
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Last week, the share price of Aussie hard rock lithium miner Pilbara Minerals (ASX:PLS) hit an all-time high off the back of its second Battery Material Exchange (BMX) auction.

The miner sold an 8,000t spodumene cargo on the spot market for an extraordinary $US2,240/t, essentially doubling the $US1,250/tonne received via the inaugural auction held late July.

This is a record price for spodumene concentrate — far above the peak at the last price cycle in 2017/18, where the highest spodumene price reached $US1,000/tonne.

The first PLS auction price (green cross below) was so far outside the trendline it caused the average price to spike in July.

BMX #2 will have an even bigger impact.

While the super high price can be partially attributed to the relatively unique and competitive form of sale (open auction), it also verified what has long been suspected – there is not enough lithium being produced to meet current demand.

Good news for miners.

Pilbara Minerals managing director Ken Brinsden says significant participation in the first round of the BMX auction, combined with lithium chemicals pricing continuing to accelerate, meant the company was always confident of strong response in the second auction.

“We were optimistic it would be a healthy price and well bid. That was certainly the case,” Brinsden told Stockhead.

“As to the final price – look, we were probably a little surprised as to where it landed.”

While a date has yet to be set, Brinsden expects at least one more BMX auction before the end of the year.

“We would say the lot size would not be much different – 8,000 to 10,000t, up to a maximum of 15,000t,” he says.

“What it boils down to is the restart of the Ngungaju operation because that’s where the volumes for the spot market will come from.”

The restart of the ‘Ngungaju’ facility at Pilgangoora — or the former Altura operation – is a very important part of the business.

At full capacity that plant should be about 200,000t of uncontracted spodumene concentrate by about the middle of next year.

“It will be about 30% of our underlying production from Pilgangoora,” he says.

“Those tonnes are well positioned to feed the emerging spot market.”

 

A maturing lithium market

Brinsden says the Pilbara Minerals would consider having other lithium companies use the BMX platform “because we advocate for greater transparency in pricing”.

The contract market — where most tonnes are sold — has traditionally been very opaque, with prices determined behind closed doors.

This, amongst other things, makes it harder for aspiring miners to get finance.

“Greater volumes in the spot market makes sense because it represents a step toward the maturity of lithium markets,” Brinsden says.

“Greater transparency is going to translate to greater, more definitive pricing outcomes, the potential for futures markets, hedging instruments – all the financial tools being built around the industry that support the flow of capital.

“That is very natural, and it happens in the growth of just about every commodities market.

“Lithium raw materials won’t be any different.”

 

The lithium price boom ‘expected to persist’

This high pricing is fundamental, Brinsden says.

“It’s all about the next round of incentive pricing to attract capital to lithium raw materials supply,” he says.

“That is what is going to be required to grow the pool of producers to support this pretty significant global demand.”

Solving the lithium shortage isn’t as easy as turning on production.

“In the hard rock space – at least as it relates to merchant spodumene supply – the next available [production] uplift besides us is probably late next year at the earliest, I would say,” Brinsden says.

Australia’s next miner is shaping up to be Core Lithium’s (ASX:CXO) ‘Finniss’ project in the NT, which is targeting first production in the second half of 2022.


 

That is why tightness in the market is expected to continue.

And while one cannot say that the market price for spodumene is now ~$US2,000/t — when the majority of spodumene supply is currently being shipped for between $700/tonne and $1,100/tonne – it does demonstrate that more is needed, Benchmark Mineral Intelligence analyst George Miller says.

“Spodumene prices such as this indicate that converter margins are being passed upstream to where the tightness is in that market — spodumene supply,” he says.

“Feedstock inventory with many spodumene converters is either non-existent or quickly dwindling.

“Meanwhile, very little additional tonnage [will] come online in the near-term as a result of underinvestment and low prices within the lithium industry over the past three years.”

 

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