4 Stocks to Buy Close to 52-Week Lows

Industrial and energy companies can find it difficult to keep up because their business can fluctuate significantly with the economy, interest rates or commodity prices.

Sometimes, when things are going poorly, it’s best to buy these companies on the downside and hope for another uptrend eventually. What’s important is that these companies need to be financially strong to prepare for difficult times.

Here are four fantastic industrial and energy stocks with solid fundamentals. All are trading near their 52-week lows today.

1. ExxonMobil

energy giant ExxonMobil (XOM 0.40%) It is a fixture of fossil fuels. The company explores, extracts, refines and sells oil and gas products. ExxonMobil has had a tremendous year in 2022 and 2023, but weak commodity prices have left the stock near 52-week lows. Oil prices have fallen from triple digits to $70 to $80 per barrel. When oil prices fall, refining margins improve, but the scale of exploration projects is too large to offset the decline in oil prices.

The good news is that ExxonMobil is financially sound. The company has $31 billion in cash on its balance sheet compared to $41 billion in total debt, resulting in net debt of just $10 billion. Investors can enjoy a solid dividend yield of 3.6% at the current stock price, and the company has raised its dividend for 41 consecutive years, showing that it has withstood many industry ups and downs.

2. NextEra Energy

Renewable energy companies and power companies NextEra Energy (nee -1.98%) In direct contrast to Exxon, it plays a huge role in renewable energy sources such as wind and solar power. Its renewable energy subsidiary is the world’s largest with projects throughout North America, and its utility business, Florida Power & Light, serves more than 12 million people in Florida. The company is also an excellent dividend stock, with 28 consecutive years of gains and a solid yield currently at 3.6%.

Next Era Energy’s stock price is suffering due to high interest rates. The company relies on borrowing money to finance investments in its business, and higher interest rates make debt more expensive and potentially hinder growth. However, interest rates tend to appear cyclically, so the market expects an interest rate cut to occur sometime this summer. Don’t miss out on NextEra’s leading position in the growing renewable energy industry. Accept stock valuations falling from over 30x earnings to 16x.

3. Archer-Daniels-Midland

Food is a core need for society, Archer-Daniels-Midland (ADM -0.52%) It plays a vital role in feeding the world. The company processes and trades grains, seeds, oils and other agricultural products globally. With a massive footprint of 750 facilities and 42,000 employees, it’s hard to compete with Archer-Daniels-Midland in terms of package size and scale. The stock is approaching Dividend King status with 48 consecutive years of dividend increases.

The company is currently under investigation by the Department of Justice over its accounting practices related to how it prices products traded within its business. When this news was delivered, the stock price plummeted and reached a new 52-week low. Investors should closely monitor developments and respect the seriousness of potential violations. At the same time, Archer-Daniels-Midland has a long track record, so it seems unlikely that the severity of the alleged breach will ruin its long-term investment thesis. This makes this bruising situation a potential buying opportunity.

4. Deere & Company

Without farming, there is nothing to eat, Deere & Company (of -0.40%) It is a leading brand of machinery used in commercial agriculture, construction, and forestry. The company’s famous green paint marks every machine in use. But Deere is more than just a machinery company. It has also transformed into a technology company. It provides farmers with machinery and software solutions to maximize efficiency and crop yields.

Now Deere is in a slump. Higher interest rates make machinery more expensive for farmers. Farmers often rely on financing to purchase the large tractors and other machinery they use. Deere’s net sales decreased 8% and earnings per share decreased 5% in the first quarter of Deere’s fiscal year ended January 28, 2024 compared to the same quarter a year ago. Consider buying stocks on weakness. Analysts believe the business will generate returns of nearly 10% annually over the long term. Deere is a classic example of a great company that, like many companies, goes through cyclical stages.