Investing in the stock exchange market can be risky without a proper plan or research. The lack of both good planning and analysis on the stocks can result in catastrophic outcomes as one may incur huge losses. However, investing in the stock exchange after doing extensive research and analysis of the chosen stocks may yield higher profits. In summary, investing in the stock exchange market can be both beneficial and disastrous. It is advantageous if one has a good plan and extensive research since it can also be catastrophic if there is no proper research and strategy. Today, NRG Energy Inc. and Gilead Sciences Inc. are among the top stocks that are worth investing in as it promises huge returns.
NRG Energy Inc.
Foremost, as the stock markets continue to regain momentum after significant losses due to the Corona epidemic, one of the most profitable stocks to invest in is NRG Energy Inc. stock. It is traded in the New York Stock Exchange (NYSE), and it is represented as NRG. NRG are stocks of the NRG Energy Inc. which belongs to the Electric utility industry as it is an integrated power firm that generates, distributes, and sells energy and energy services. One of the crucial factors to consider before investing is the value of the stock. In the past month, NRG shares increased by 10%, which is against the energy industry’s 5.1% decline.
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Furthermore, NRG stocks have a Zacks Rank of 2 and have a grade value of “A”. Such types of stocks are worth investing in as they have high possibilities of earning returns. Still, NRG has a Forward P/E ratio of 5.91. NRG’s Forward P/E of over the past 52 weeks depicts that it had a high of 9.24, a low of 3.80, and an average of 7.43 (Yahoo Finance, 2020). On May 21, 2020, NRG stock closed at 35.30 and opened on May 22, 2020, at 35.50. Through identifying NRG stocks of the recent, it is therefore essential to understand why it is profitable to invest in the NRG stocks.
The NRG's Zacks Rank of 2 and the grade value of "A" are attributing factors to why it is wise to invest in NRG stocks. Stocks that have higher Zacks Rank and grades Value of “A” are the best option of shares to invest in at any given time since it guarantees investors higher returns (Yahoo Finance, 2020b). Such kinds of stocks are believed to be undervalued by the market, and yet they have promising returns to investors’ money. Therefore, the NRG stock is one of the best investment options because of its Zacks Rank of 2 and the grade value of "A".
Another reason that one would recommend NRG stocks is because of the high dividend yields. NRG dividend rate as per the first quarter of 2020 was $1.20 per share and is expected to grow at a rate of 7-9% per share (Yahoo Finance, 2020). However, according to the current analysis, NRG’s dividend yield stands at 3.78% higher compared to Zacks S&P 500 composite’s 2.23%. Another reason for the recommendation is the cost-saving initiative by NRG. The initiative is aimed at strengthening earnings and boosting cost savings and shareholder’s value. With such plans, the NRG stock is worth one’s investments.
However, the pro in investing in the NRG is that the company has strategic plans for its future that aims to grow the company further. Alongside such strategies is the shares grade Value and Zacks Rank, which both assure one that investing in NRG stocks is the best decision. The con of investing in NRG is the possibility of failure of the company's strategies. Such failure may lead to the decline of the company's stock, leading to losses.
Gilead Sciences
The second option of investing is in Gilead Sciences Inc. and is ranked among the top fastest-growing stocks. Gilead Sciences is concerned with the manufacture of drugs, specializing in the manufacture of treatment for liver and respiratory diseases and the Human Immunodeficiency Virus (HIV), among other diseases. Currently, there are ongoing studies in Gilead Science which is aimed at experimenting with a new drug that is designed at fast recovery for Covid-19 patients. Its shares are named Gilead Sciences Inc., represented as GILD, and are traded in the Nasdaq. GILD's shares closed at $73.50 as of May 21, 2020, and opened at 73.09 on May 22, 2020 (Yahoo Finance, 2020c). Furthermore, its 52-week range is at 60.89 (its lowest) and 85.97 (its highest) with its average volume being at 24,949,658.
One of the primary reasons behind the recommendation in investing in GILD shares is because of its Zacks Rank of 2. Stocks that have higher ranks means that they have a higher possibility of profitability to investments. Furthermore, the shares have increased by 13.1% compared to its industry’s growth of 7.3% (Yahoo Finance, 2020c). Such an increase is evidence that GILD shares promise to return investors' investment way faster. In terms of dividend yield, it has a dividend yield of 2.72, which is 3.68%. Therefore, the GILD shares are worth an investment option because of its fastest growth rate.
However, there are pros and cons to investing in GILD shares. The advantage of investing in GILD is that it has a fast growth rate and promises to return investments faster compared to other stocks. The rapid growth rate is attributed to its experimentation on a new drug that aims to cure Covid-19 patients more quickly. The success of the study would result in the high growth rate of the company, profiting investors. However, the con of GILD investments is that it is based on faith that the study succeeds. The failure of the research would lead to a drop in GILD shares which would result in losses of investments.
Conclusion
In summary, investments in shares can be a tricky decision and often challenging to decide. However, through proper analysis of the stock market, an individual can make quality investments that promise huge returns. Among the top stocks worth investing in are NRG and GILD stocks with NRG being more favorable. The investment in NRG is worth recommending since it promises enormous returns to investments and also due to the company’s strategies.
References
Yahoo Finance. (2020a). Reasons to add NRG Energy (NRG) stock in your portfolio now. https://finance.yahoo.com/news/reasons-add-nrg-energy-nrg-165504190.html
Yahoo Finance. (2020b). Is NRG Energy (NRG) a great value stock right now? https://finance.yahoo.com/news/nrg-energy-nrg-great-value-155003019.html
Yahoo Finance. (2020c). Gilead Sciences, Inc. (GILD). https://finance.yahoo.com/quote/GILD?p=GILD&.tsrc=fin-srch
