Blue chip stocks that investors could count on in the last decade lost their luster. The stock prices faded in the last few months without warning. Now that they are on sale, investors might consider starting a position in them.
Pepsi (PEP) sells high-sugar pop drinks and high-fat snacks. The advent of obesity drugs continued to hurt the total addressable market for Pepsi. While Coca-Cola (KO) trended higher, Pepsi shares faded. The stock fell from over $145 to below $130 in only a few weeks.
PEP stock offers a yield that nears 4.5% - 5.0%.
McDonald’s (MCD) faces the same problem as Pepsi. In addition, the restaurant failed to lower its reliance on burgers amid beef inflation. Although competitors are faring well by selling chicken, McDonald’s is in value territory. The stock has a dividend that yields 3.0%.
Bank of America (BAC) shares slumped to a price not seen since June. Investors lost confidence in a booming U.S. economy. Interest rates will eventually slow economic growth in the next three to six months. BAC stock is pricing in that slowdown.
Nike (NKE) keeps closing at fresh 52-week lows. At multidecade lows, NKE stock is in deep value territory. Direct-to-consumer sales are struggling, which will hurt any immediate turnaround play. In the low $30s, NKE stock will yield around 5%.
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