Here are seven of the best ways to invest $1,000 right now.
If you have an extra $1,000 sitting in a savings account, one of the best ways to put that money to work is to invest in the stock market. If it’s the first $1,000 you’ve ever invested, buying a low-cost, diversified S&P 500 exchange-traded fund, such as the SPDR S&P 500 ETF Trust (ticker: SPY) is a relatively low-risk place to start. However, if you’d rather start building your own stock portfolio from scratch, here are seven blue-chip stocks to buy right now with $1,000 that have “buy” ratings from the Morningstar analyst team.
Meta Platforms Inc. (FB)
First among the best stocks to buy now with $1,000 is Meta Platforms, the parent company of popular apps Facebook, Instagram, WhatsApp and Messenger. The company recently announced a rebranding that marks a transition in focus from social media to the metaverse, a virtual world that is like a version of the internet that users enter rather than just view. Analyst Ali Mogharabi says Facebook and Instagram’s massive user bases will continue to grow, presenting an unmatched opportunity for advertisers. Facebook recently reported that 3.58 billion users access at least one of its apps per month. Morningstar has a “buy” rating and a $404 fair value estimate for FB stock, which closed at $341.66 on Dec. 15.
Berkshire Hathaway Inc. (BRK.B)
For investors seeking diversification within a single stock, Berkshire Hathaway is a great place to start. Berkshire is the holding company run by CEO and Wall Street legend Warren Buffett. Berkshire holds stakes in more than 40 different public companies, including Apple Inc. (AAPL), Bank of America Corp. (BAC) and American Express Co. (AXP). Berkshire also wholly owns several subsidiaries, including GEICO, Duracell and Dairy Queen. Analyst Greggory Warren says Berkshire’s decentralized business model, impressive cash flow, diversified investment portfolio and exceptional balance sheet make it a unique investment opportunity. Morningstar has a “buy” rating and a $320 fair value estimate for BRK.B stock, which closed at $294.58 on Dec. 15.
Exxon Mobil Corp. (XOM)
Exxon Mobil is the largest U.S. oil and gas major. The company is streamlining its operations, including cost cuts and portfolio improvement. Analyst Allen Good says Exxon has remained mostly committed to oil and gas. It may be counterintuitive, but Good says Exxon’s strategy of reducing the carbon footprint of its existing business is likely to be more successful than the strategy of competitors going all-in on alternative energy. The company expects to double its 2019 earnings by 2025. Morningstar has a “buy” rating and a $76 fair value estimate for XOM stock, which closed at $61.26 on Dec. 15.
Salesforce.com Inc. (CRM)
Salesforce.com is the largest provider of customer relationship management software. Analyst Dan Romanoff says Salesforce is one of the best long-term growth opportunities in the software space. In the third quarter, Salesforce exceeded expectations and reported 27% revenue growth in the first full quarter of earnings that included its Slack acquisition. Even as revenue growth slows in coming quarters, Romanoff says margin expansion should allow Salesforce to maintain 20% earnings growth. He says Salesforce is considered the leader in each of its primary markets. Morningstar has a “buy” rating and a $320 fair value estimate for CRM stock, which closed at $260.04 on Dec. 15.
Comcast Corp. (CMCSA)
Comcast is a diversified media conglomerate with exposure to cable and broadcast TV, movie and TV production, satellite TV broadcasting, and theme parks. Analyst Michael Hodel says Comcast’s overall third-quarter numbers were solid, but its Peacock streaming service continues to disappoint. Peacock revenue nearly doubled compared to the second quarter but still only represents about 3% of the NBCUniversal segment revenue. Still, Hodel says Comcast’s core cable business has significant competitive advantages and is gaining market share. In addition, he says NBCUniversal has unique, valuable assets and franchises. Morningstar has a “buy” rating and a $60 fair value estimate for CMCSA stock, which closed at $48.18 on Dec. 15.
Coca-Cola Co. (KO)
Coca-Cola is the world’s largest soft drink company. Analyst Erin Lash says the soft drink market is mature, but Coca-Cola has been investing heavily in high-growth products in the premium water and energy drink markets. Lash says Coca-Cola also has opportunities to extract additional value from its core carbonated soft drink business, particularly in emerging market economies. Coca-Cola already derives 40% of sales from emerging markets that have relatively low per-capita soft drink consumption. She says Coca-Cola’s scale, technology and investments in innovation are also value drivers. Morningstar has a “buy” rating and a $59 fair value estimate for KO stock, which closed at $58.06 on Dec. 15.
Verizon Communications Inc. (VZ)
Verizon Communications is the largest U.S. wireless carrier. Hodel says Verizon has generated some momentum in recent quarters, making its dividend-paying stock attractive from a valuation standpoint. Verizon added 429,000 net new postpaid phone customers in the third quarter, and revenue per customer postpaid account was up 3.8%. Hodel says investors can expect stable, modest growth from Verizon over the long term. The stock also pays an attractive 5.1% dividend and trades at just 9.4 times forward earnings. Morningstar has a “buy” rating and a $58 fair value estimate or VZ stock, which closed at $50.56 on Dec. 15.
Best stocks to buy with $1,000:
Meta Platforms Inc. (FB)
Berkshire Hathaway Inc. (BRK.B)
Exxon Mobil Corp. (XOM)
Salesforce.com Inc. (CRM)
Comcast Corp. (CMCSA)
Coca-Cola Co. (KO)
Verizon Communications Inc. (VZ)
