Many investors have made money by buying the dip and being greedy while others are fearful. In today’s fearful markets, there are plenty of bargains. But some companies may continue to struggle right now, leading their share price lower.
Buying companies who have seen their stock price increase this year may be a better way to go. Those companies that can deliver now can likely continue higher no matter what market conditions develop. Playing to that momentum could fare well.
For instance, life insurance company Metlife (MET) is up 17 percent in the past year, essentially the mirror image of the S&P 500. The company has been raising its dividend, and increasing its buyback program.
But shares are still cheap, trading for less than 9 times forward earnings.
Given the slow-and-steady growth of the life insurance industry, plus its regulated status to be profitable for shareholders, and it’s easy to see why the company’s current upward stock momentum could continue.
Action to take: Investors can buy into a dividend growth play here, with a starting yield of 2.7 percent.
For traders, the March 2023 $80 calls, last going for about $2.50, offer mid-double-digit returns in the months ahead.
That may not sound like much compared to a tech stock, but for a regulated industry like life insurance, it’s an excellent prospective return.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.