It’s probably safe to say that no one had a “global pandemic” on their 2020 bingo card. But as the dust settles on a year filled with unprecedented developments medical, economic, and political, it’s time to look ahead to 2021 and the equity investing opportunities it offers. Here are the best stocks that worth buying in 2021.
Entertainment and Parks
By and large, entertainment businesses that own venues and theme parks suffered badly in 2021. With an economic reopening on the horizon, foot traffic may return when a vaccine makes it safer for people to enjoy social activities in public. These three stocks have the potential to be bought at a discount now for upside later on as the economy reopens.
- Dave and Buster’s (PLAY)
- Live Nation Entertainment (LYV)
- Six Flags (SIX)
Restaurants
In 2020, this sector has bounced between closed, to open for deliveries only, to outdoor dining, to closed again. That meant rituals like the daily chai latte were relegated to the drive-thru. Businesses regrouped and replicated an in-restaurant experience via delivery and outdoor dining, which incurred costs.
Stocks for major restaurant and coffee chains, then, can be bought at a discount now, with the prospect of customers returning as the economy opens back up.
- Restaurant Brands International (QSR)
- Shake Shack (SHAK)
- Starbucks (SBX)
- S. Foods (USFD)
Retailers
Retail—especially brands that were less well-equipped to pivot to e-commerce—got hit hard by the pandemic. Not only were people not visiting malls or buying work clothes, but fashion as a whole substitute to sweatpants and leisurewear, sending many fashion retailers into a prolonged dip.
With retail, investors should be on the lookout for brands that continue to support trends that began in the pandemic, like home improvement names as folks continue to work from home—some permanently—as well as retailers that offer discounted or flexible retail experiences.
- Aaron’s Furniture (AAN)
- Big Lots (BIG)
- Croc’s (CROX)
- Lowe’s (LOW)
Energy Stocks for 2021
Why? Because the world runs on power, and green power, in particular, is primed to be rewarded.
The world is changing the way energy is produced, and pandemic-related shifts in consumption patterns have only accelerated the changes. Lower carbon and carbon-free production is on the rise, so look to companies that could stand to gain from their contributions to California’s new electric vehicle mandate. In addition, check out energy stocks that offer above-average dividends to help bolster other sectors in your portfolio that might be good buys at today’s discounts, yet need a longer runway to show returns at more normal levels.
- Diamondback Energy Inc. (FANG)
- Pioneer Natural Resources (PXD)
- Plug Power (PLUG)
- Williams Companies (WMB)
Healthcare Stocks for 2021
Why? If 2020 has made anything clear, it’s the value of rapid healthcare innovation. Experts and analysts think leaders in this sector are currently less valuable.
While the frontrunners in this sector might be companies set to roll out vaccines, beyond pharma other names may be primed for a bounce higher in 2021. Look for companies that will benefit from elective surgeries coming back onto the schedule at surgery centers nationwide and other major medical device suppliers who have had use for their products stalled because of the necessary shift to Covid-centric care.
- Hill-Rom (HRC)
- Becton, Dickinson & Co. (BDX)
- Baxter International, Inc. (BAX)
Technology Stocks for 2021
Why? Experts expect habits formed during the pandemic, like delivery services and online shopping, to persist during the recovery. That’s why they favor tech names that provide e-commerce infrastructure and the information technology companies that support these changed behaviors.
Large-scale retail marketplaces and e-commerce tech companies that empower small businesses will likely only continue to grow. Any retail business which provides online shopping features will survive as consumer demand for savvy online shopping experiences only grows stronger.
- Alibaba Group (BABA)
- Dell (DELL)
- Shopify (SHOP)
- Sonos (SONO)
Industrial Stocks for 2021
Why? as Forbes states because folks might finally be, in the words of Southwest Airlines, “free to move about the country,” and that means more travel (note that airlines are considered part of the industrial sector). If e-commerce continues to remain strong, as many anticipate, shipping-related industrials may also benefit.
In this sector, investors might keep an eye out for companies that move goods from point A to point B and those that manufacture shipping-related products—like dry ice for vaccine shipments and bulk shipping supplies. Airline stocks were especially hard-hit and an acquisition now when flights are still limited could set you up for gains as people feel safe and comfortable sitting in too-close coach-class seats once again.
- FedEx (FDX)
- UPS (UPS)
- American Airlines (AAL)
- Delta (DAL)
- Southwest Airlines (LUV)