UBS names its ‘best single stock ideas’ in the U.S. right now
Swiss bank UBS has revealed a list of “key investment ideas,” selecting stocks based on factors such as market conditions, economic trends and government policy. “We focus on the equity asset class and highlight our best single stock ideas in the US tied to select messages,” the bank’s Chief Investment Office stated in a July 17 research note, adding that its ideas are updated monthly. For those seeking “diverse and durable income,” UBS said to look for “quality dividend-paying equities.” Its picks included Burger King-owner Restaurant Brands International for its “predominantly franchised business as it insulates the company from insulation and other cost headwinds.” It also chose wind energy company Xcel Energy , which it said is “well positioned to outperform the S & P Utilities index over the next 12 months.” Also on the list is real estate investment trust (REIT) WP Carey , for its “strong, experienced management team with an excellent long-term track record of generating solid returns.” Starbucks is a pick for UBS under the heading “equity laggards,” with the bank liking its “strong sales recovery in North America.” It also said it sees an opportunity for the chain in China as it reopens post-Covid-19. UBS’ analysts also name discount retailer TJX Companies as an “equity laggard,” expecting the sector to benefit from consumers under inflationary pressure. They also named telco infrastructure firm American Tower for its dominance of the sector. Green investment, infrastructure ideas “Green investment, decarbonization commitments, consumer sentiment, and regulation will continue to drive the case for investing sustainably,” UBS said in the note, picking several stocks under the “go sustainable” theme. Gas and chemical company Air Products is a pick because it is “leaning into ‘blue’ and ‘green’ hydrogen and sustainable aviation fuel with an ambitious slate of projects,” the bank stated. UBS also likes NextEra Energy for its “strong management team” and said it is set to benefit from the Inflation Reduction Act. U.S. and European policies supporting infrastructure play into UBS’s “invest in infrastructure” ideas, including nuclear power company Constellation Energy , which it said was a beneficiary of the U.S. Inflation Reduction Act. UBS also chose data center company Equinix , liking its “high degree of recurring revenue” and the trend toward cloud-based applications. “The stock ideas listed under key investment ideas reflect current views as of publication,” the bank stated. — CNBC’s Michael Bloom contributed to this report.
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