CJT:CC - 2 Blue-Chip Stocks That Are Screaming Buys in May 2023
2023-04-27 18:15:00 ET
May is almost here. This can mean blooming flowers for most of the country. In the financial world, we’re about to be hit with earnings reports, including from some strong blue-chip stocks.
Today, I’m going to look at two blue-chip stocks that I would pick up before those earnings come out, because we could be in for a solid boost in May 2023.
Cargojet stock
Cargojet ( TSX:CJT ) hit 52-week lows recently, but there’s no discernible reason why. There hasn’t been any major insider trading and no news or analyst coverage to suggest that investors should sell. It seems that the incoming earnings report has investors skittish.
Honestly, that’s why now is an excellent time for investors to consider Cargojet stock. The company has a solid, long track record of paying out dividends, with a payout ratio at just 11%. That means it’s holding 89% in profit to help with its recent growth and expansion.
That expansion includes some major partnerships with some of the world’s largest dealers, like DHL. It’s becoming an even more global company, adding new fleets of aircraft as well as destinations. And yet shares are down 33% in the last year, trading at a valuable 10 times earnings.
Earnings are due May 1, so I would certainly consider picking up the stock ahead of earnings. There could be a boost, as investors realize this company is swimming around oversold territory. Meanwhile, it remains a solid blue-chip company with a massive amount of growth potential in the near and distant future.
CP stock
Then we have Canadian Pacific Kansas City ( TSX:CP ) continuing to trade near all-time highs. The company gathered steam with the acquisition of Kansas City Southern going through earlier this year. Now, as of this week, the merge of two companies is official. Together, they create the only railway that runs through all North America from Canada down to Mexico.
Yet even as it trades near all-time highs, this stock is just warming up, in my opinion. A lot of this growth has been slow and steady, but there hasn’t been much proof of what the company can achieve in the near future. We need earnings — earnings that will include the performance of this new company. And that’s still a ways off yet.
In the meantime, CPKC continued to show that its rail lines can produce, with record-setting amounts of grain shipped during its last report. Shares are up 13% in the last year, but analysts believe it has clear room to run.
Furthermore, while it cut its dividend in the last few years to fund the acquisition, this move proved management’s responsibility. It now has a payout ratio of 20% and will likely increase that dividend as soon as it’s affordable to do so. Therefore, this is also certainly one of the blue-chip stocks I would consider, especially for long-term holders.
The post 2 Blue-Chip Stocks That Are Screaming Buys in May 2023 appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has positions in Canadian Pacific Railway and Cargojet. The Motley Fool has positions in and recommends Cargojet. The Motley Fool recommends Canadian Pacific Kansas City. The Motley Fool has a disclosure policy .
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