The 21 best stocks to buy for the rest of 2021

Call it a comeback. Many of the best stocks to buy for the rest of this year remain heavily tied to economic recovery prospects.

  • By Charles Lewis Sizemore,
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2021 might have been the most anticipated year in history, or at least in recent memory. After the hard slog of 2020 and the COVID-19 pandemic, 2021 would have to be better by default. That's why, as analysts went about picking their best stocks to buy for 2021, they focused on recovery stories.

A small wrinkle in that, as we consider the best stocks for the rest of this year: COVID is, alas, still with us, and the delta variant is driving a third wave. And alas, we're having to dust off our masks to enter a lot of public places.

But with more than 70% of American adults having received at least one dose of a vaccine, the damage is expected to be at least less severe this time around, for what that's worth.

"We see the virus trends, and it's something we take seriously," says Sonia Joao, senior partner at Robertson Wealth Management, a Houston-based registered investment adviser (RIA). "But at this stage, we're not expecting a major market reaction, as investors appear to be looking past virus concerns and focusing on accelerating earnings. We may see a little market volatility if cases continue to spike, but we're not expecting major disruption."

There will be surprises. There always are. But several trends are emerging as potential winners in the second half of 2021 and beyond. Commodities are doing well, due in part to expectations of higher spending on infrastructure. Technology should continue to be a major driver, as trends that accelerated during the pandemic still have plenty of gas in the tank.

More than anything, though, the theme should be normalization as the economy continues to battle its way back to normalcy.

Today, we're going to look at 21 of the best stocks to buy as we think about the back half of 2021 and beyond.

Data is as of Aug. 4. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

Amazon.com

  • Industry: Internet retail
  • Market value: $1.7 trillion
  • Dividend yield: N/A

Apart from a few companies, such as Zoom Video (ZM), which went from relative obscurity to becoming an integral part of the daily routine for most of corporate America, few companies benefitted more from the lockdown economy than Amazon.com (AMZN). Nearly anything you could imagine buying could be fulfilled by Amazon and could be on your doorstep in generally less than 24 hours.

But here's the thing. While Americans are indeed returning to the malls, they're likely to continue buying a much larger percentage of their purchases online than they did before the pandemic. That trend was already firmly in place, and the pandemic simply sped it up.

Wedbush, who rates AMZN at Outperform (equivalent of Buy), writes that "Revenue growth should decelerate in 2021 but remain above 2019 levels" – in other words, growth might slow slightly from last year's windfall levels but still eclipse pre-pandemic levels. Meanwhile, "Amazon's profitability should expand as it grows operating expenses more slowly than revenues. Amazon Web Services, Fulfillment by Amazon, and ads should drive steady margin expansion, with Prime memberships driving overall retail revenue growth."

AMZN is one of the best stocks to buy for the remainder of 2021 … and likely for years to come.

Realty Income

  • Industry: Retail real estate
  • Market value: $27.3 billion
  • Dividend yield: 4.0%

Amazon might very well be taking over the world. But brick-and-mortar retail is far from dead. In particular, service businesses will always need physical locations. Amazon can't deliver a haircut or clean your teeth (at least not yet). And high-traffic retail, such as pharmacies, convenience stores and gas stations won't be going anywhere any time soon.

This brings us to another stock to buy for the remainder of 2021 and beyond, Realty Income (O).

Realty Income is a "triple-net" real estate investment trust (REIT), which means its tenants are responsible for paying all taxes, insurance and maintenance. The landlord's responsibility here is limited to cashing the rent checks and not much else.

O owns a portfolio of more than 6,700 properties spread across 50 states, Puerto Rico and the United Kingdom. It boasts 630 distinct tenants encompassing 58 separate industries. Its top five tenants, accounting for just over 22% of the portfolio, include 7-Eleven, Walgreens (WBA), Dollar General (DG), FedEx (FDX) and British supermarket chain Sainsbury's.

Some of Realty Income's tenants, particularly in the movie theater and gym spaces, got zinged badly during the pandemic. But these tenants are recovering as life returns to normal. This should only continue in the second half of 2021.

Now, let's talk dividends. If you need an income superstar to pay your bills in 2021 and beyond, Realty Income is easily one of the best stocks to buy. It pays its dividend monthly rather than quarterly; it has made 612 consecutive monthly dividends and raised the dividend for 95 consecutive quarters.

National Retail Properties

  • Industry: Retail real estate
  • Market value: $8.4 billion
  • Dividend yield: 4.4%

Along the same lines, National Retail Properties (NNN) is a strong contender for the remainder of 2021. Bond yields, which started the year in a strong uptrend, have collapsed of late as investors seems to be less concerned about rising inflation. Falling bond yields mean rising bond prices. And that means strong tailwinds for "bond like" investments like NNN.

National Retail Properties isn't a bond, but along with Realty Income, it's about as close to a bond as you can get in the stock market. As a triple-net landlord, NNN has very little in the way of an actual "business." The company collects rent from tenants, then recycles that rent into dividends.

And speaking of dividends, National Retail Properties has raised its payout for 31 consecutive years and counting. At current prices, it yields 4.3%.

You're not going to get rich quick in NNN. It's a landlord that leases out to convenience stores and car washes, for crying out loud. But if you're looking for a steady-Eddie dividend payer that will keep trucking along no matter what the economy throws at it, National Retail Properties belongs in your portfolio. And with real-economy plays back en vogue, don't be surprised if this stodgy retail REIT outpaces the market for the remainder of 2021.

LyondellBasell Industries

  • Industry: Specialty chemicals
  • Market value: $32.4 billion
  • Dividend yield: 4.5%

In the stock market, boring can be beautiful. Investors often chase flashy, headline-grabbing stocks while ignoring gritty industrial workhorses. This creates opportunities for value investors willing to look beyond the headlines.

As a case in point, consider LyondellBasell Industries (LYB). This is about as far from sexy as you can get. It's a dirty plastics, petrochemicals and refining company in an era during which investors place a premium on environmentally friendly green companies.

But with the economy roaring back to life, cyclical industrial plays like Lyondell are doing well, and that's likely to continue.

"Driven by industrial and consumer demand, low inventories and customer order backlogs, the strong momentum of the past couple of quarters should continue for the reset of this year and into 2022," says Jefferies analyst Laurence Alexander (Buy). "Given the strength in the leading indicators, we expect petrochemicals prices to remain strong through at least 2022."

Lyondell trades at a price-to-earnings (P/E) ratio of just 8 and yields an attractive 4.5% in dividends. And while the stock has enjoyed an epic run since bottoming out March of last year, it remains just barely above pre-pandemic levels. That's why LYB is one of the best stocks to buy right now: It's a cheap stock in a market that is anything but cheap.

Enterprise Products Partners LP

  • Industry: Midstream oil and gas
  • Market value: $48.6 billion
  • Distribution yield: 8.0%*

The past 10 years have been a lost decade for the midstream energy sector (read: oil and gas pipelines and storage). As a case in point, consider that Enterprise Products Partners LP (EPD) – considered by many to be the blue chip of the master limited partnership (MLP) space – today trades at levels first seen in late 2011.

But here's the thing. While Enterprise's stock price hasn't budged, its underlying businesses have been expanding, as have its cash distributions. Ten years ago, Enterprise paid 30 cents per quarter in distributions; today, the payout is fully 50% higher at 45 cents. At current prices, that works out to a massive yield of 8%.

"[Enterprise Products Partners] should continue to benefit from higher volume as the economy recovers," says Argus Research analyst Bill Selesky, who rates the EPD stock at Buy. "EPD also has a strong balance sheet with below-industry-average leverage, and a well-regarded management team. On valuation, EPD appears attractive based on historical P/E and our discounted cash flow analysis."

Selesky also notes Enterprise's 22-year streak of distribution hikes.

It has been a long road for midstream stocks like Enterprise, but valuations are attractive and the shares have been trending higher. If the economy cooperates, EPD could be one of the best stocks for the rest of 2021 and beyond.

* Distributions are similar to dividends but are treated as tax-deferred returns of capital and require different paperwork come tax time.

Kinder Morgan

  • Industry: Midstream oil and gas
  • Market value: $38.8 billion
  • Dividend yield: 6.2%

If you like the bullish thesis for Enterprise Products Partners, then you should be equally enthusiastic about Kinder Morgan's (KMI) prospects for the rest of 2021 and beyond.

Kinder Morgan is one of the largest energy infrastructure companies in the world with approximately 83,000 miles of pipelines and 144 terminals spread across North America. Approximately 40% of all natural gas consumed in the United States passes through Kinder Morgan pipelines.

Pipeline stocks have been a no-man's land for years, and Kinder Morgan is no exception. Shares have been trending higher since November 2020 but remain below their pre-pandemic levels and are still more than 60% below their 2015 highs. In Kinder Morgan, you get the opportunity to buy a cheap stock in a cheap sector that, after years of declines, is finally trending higher. And you're getting paid a 6%-plus dividend while you wait!

Simply returning to pre-pandemic levels would mean upside of nearly 30% from current prices, not including the dividend. That's not too shabby in a market in which value is getting increasingly difficult to find.

Ryder System

  • Industry: Rental and leasing services
  • Market value: $4.1 billion
  • Dividend yield: 3.0%

Ryder System (R) is best known for its ubiquitous trucks crisscrossing America's roads. Ryder owns and rents more than 235,000 trucks and other commercial vehicles of assorted shapes, sizes and functions.

It also does a lot more than that. Ryder offers a turnkey logistics and supply-chain operation, including e-commerce fulfillment. Building out a logistical operation takes time and capital that most companies simply don't have, and Ryder offers this, ready to go, as a service.

There is no company on earth that is truly "Amazon-proof," but Ryder seems as close as you can get. It might be an economy stock, but its services are critical to the functioning of the new economy.

Ryder sports a current dividend yield of 3%, which is more than double the S&P 500's (.SPX) historically modest yield. Better still: Ryder is a dividend growth stock that has more than doubled its payout since 2011.

R shares have enjoyed a fantastic run over the past year, though the price remains at 2013 levels. Still, that means this pick could have further to run if value stocks remain in favor.

Vale

  • Industry: Industrial metals and mining
  • Market value: $109.3 billion
  • Dividend yield: 4.0%

Commodities have enjoyed a great first half in 2021 as rising demand from a reopening economy combined with curtailed supply due to pandemic-related bottlenecks to create some of the best pricing conditions in decades. These conditions likely will take time to correct, which is good news for Vale (VALE), the Brazilian miner. Vale happens to be one of the world's largest producers of iron ore and is also a major producer of other industrial metals and precious metals.

Like most miners, Vale had a rough run in the years leading up to 2020. The shares were in free fall off and on for most of the past decade.

It's not that Vale did anything particularly wrong. It simply had the classic problem of having a nice house in a bad neighborhood. Neither commodity stocks nor emerging market stocks never really recovered after the 2008 crisis. Well, Vale is both a resource stock and an emerging market stock. It never stood a chance.

But then, conditions finally improved in 2020. Emerging markets and commodities both finally bottomed out. Vale stock has more than tripled since hitting lows in March 2020, and more gains could be on the way.

"The major iron ore miners should be the standout performers due to extraordinarily high iron ore prices, free cash flow and dividends in the period," says Jefferies analyst Christopher LaFemina (Buy). "This should not be a surprise as these companies have pristine balance sheets and a track record of large capital returns, but we do believe that the market still under-appreciates the magnitude of the upcoming capital returns."

He adds that he thinks Vale – as well as BHP (BHP), Rio Tinto (RIO) and Fortescue (FSUGY) – are "likely to announce strong results and very large dividends." LaFemina forecasts annualized capital return yields of 18.5% for Vale, including its ongoing buyback program.

Mining stocks can be wildly volatile, of course. But with industry conditions positive for the first time in years, Vale could be one of the best stocks to buy for the rest of 2021 and even farther out.

Freeport-McMoRan

  • Industry: Copper
  • Market value: $52.2 billion
  • Dividend yield: 0.8%

Along the same lines, shares of Freeport-McMoRan (FCX), one of the world's largest copper miners, look like a good bet.

Copper is a critically important commodity in construction, particularly in electricity and plumbing. Roughly 43% of all mined copper is used in construction, and another 20% is used in building transportation equipment.

Congress just agreed to a trillion-dollar infrastructure package, and you can bet that other countries will be looking to infrastructure spending as well to boost their post-pandemic economies. Copper stocks such as Freeport, then, suddenly have the potential to be some of the best stocks for the remainder of 2021.

In late July, CFRA reiterated its Strong Buy recommendation on FCX shares, with analyst Matthew Miller writing "We remain bullish on the outlook for copper in the short term and long term, and FCX is poised to grow copper production 20% in '21 and 15% in '22."

Jefferies reached the same conclusions.

"As we dig deeper into the results and the outlook, we see reasons to be more positive on FCX shares," says Jefferies' LaFemina (Buy). "These reasons include good operating performance, insights regarding high-return, low capital intensity projects at Lone Star and Grasberg, and a very substantial and unique, low-risk organic growth pipeline. We expect FCX shares to perform well between now and year-end."

Caterpillar

  • Industry: Farm and heavy construction machinery
  • Market value: $112.0 billion
  • Dividend yield: 2.1%

Continuing the general theme of infrastructure, heavy equipment maker Caterpillar (CAT) should be an excellent choice for the remainder of 2021.

If you're bullish on construction and mining, it only stands to reason that you'd be bullish on the leader supplier of equipment to those sectors. Caterpillar makes compactors, asphalt pavers, excavators, backhoes and pretty much everything else you'd expect to see in major infrastructure project.

"The strength of CAT stock and the broader Machinery space is not very surprising in the context of cycle positioning," says Deutsche Bank analyst Nicole DeBlase (Buy). "Machinery stocks tend to show their best performance in years 1-2 of an economic recovery, driven by outsized positive EPS revisions."

In the years leading up to the pandemic, Caterpillar had mostly traded in a range. But with infrastructure spending and construction spending in general looking to accelerate in the years ahead, Caterpillar's shares are showing definite signs of life that could carry through well into 2022.

Oshkosh

  • Industry: Farm and heavy construction machinery
  • Market value: $7.8 billion
  • Dividend yield: 1.1%

Apart from increased infrastructure spending, President Joe Biden's single most important spending priority has been the shift to greener energy. Oshkosh (OSK) is particularly attractive for the second half of 2021 because it sits at the intersection of both these themes.

Oshkosh is a maker of specialized heavy-duty trucks and equipment. It builds military vehicles, firetrucks, cement mixers, truck mounted cranes, and hydraulic lifting systems.

Oshkosh makes battery-powered versions of many of its specialty trucks, which endears it to the Biden administration. And earlier this year, the company snagged the contract to build a new generation of mail trucks for the U.S. Postal Service.

There aren't a lot of players in the areas where Oshkosh operates, which is good. That means competition is limited. Here's where story gets even better: Deutsche Bank's DeBlase (Buy) says Oshkosh plays in the "sweet spot" for heavy machinery stocks as it has "no exposure to China or agricultural equipment [but] elevated exposure to U.S. infrastructure."

In other words, Oshkosh's product mix is exactly where it needs to be to finish 2021 strong.

Newmont

  • Industry: Gold
  • Market value: $49.4 billion
  • Dividend yield: 3.5%

Is inflation making a comeback?

It's difficult to say. The Federal Reserve insists that the soaring prices we see today are "transitory." They are a result of pandemic-related supply disruptions and abnormally high demand. Once things get a little closer to normal, inflation will fall back into a more normal range.

Maybe. That seems to be the scenario that the bond market is pricing in right now. But what if – just if – the Fed is wrong here and inflation ends up being not-so-transitory?

If you think there is even a remote chance of that, owning a little gold makes sense. And owning a blue-chip miner like Newmont (NEM) is a way to potentially turbocharge the returns of gold. Gold miners tend to behave like leveraged investments in gold. It's a volatile sector, but that volatility comes with the potential for outsized returns. In the last major bull market in gold, Newmont's shares more than tripled in value.

CFRA's Matthew Miller maintained his Strong Buy rating on Newmont in late July, calling it "one of our top picks in gold mining."

"We highlight NEM's strong five-year outlook of stable gold production that should average 6.5 million ounces annually at all-in sustaining costs that should be less than $900 per ounce," he wrote. "NEM's robust free cash flow profile supports its best-in-class dividend (current yield of 3.5%) and organic growth projects."

Gold could do well this decade, and Newmont is a good way to play that trend.

Nvidia

  • Industry: Semiconductors
  • Market value: $505.2 billion
  • Dividend yield: 0.1%

One of the unexpected beneficiaries of the cryptocurrency craze has been Nvidia (NVDA). Long respected among gamers for the quality of its GPU graphics cards, it turns out that that Nvidia's hardware can do a lot more than spice up video game graphics. Its chips are the go-to for miners of bitcoin and other cryptocurrencies.

That's hardly all. They're also instrumental in artificial intelligence (AI), self-driving cars, medical research and data centers. Essentially, every major computing endeavor of the past several years requires Nvidia chips. And not surprisingly, the stock has enjoyed a nice run, rising from a split-adjusted $32.66 per share at the beginning of 2019 to just above $200 today.

Speaking of which, CFRA analyst Angelo Zino (Buy) says that the 4-for-1 split, effective in mid-July, "could help support NVDA's case to be added to the price-weighted Dow 30 index." Nvidia has become such a critical piece of the modern economy, it rightly deserves consideration for the Dow Industrials.

"Looking ahead, we think NVDA remains poised to see improving momentum within its data center business (20% plus growth through FY 25), with demand aided by an acceleration in enterprise orders in the second half of the calendar year," Zino adds.

If you're tapping the hardware industry for growth, NVDA could be one of the best stocks to buy and hold for years.

Taiwan Semiconductor Manufacturing

  • Industry: Semiconductors
  • Market value: $615.8 billion
  • Dividend yield: 1.5%

One of the stranger byproducts of the pandemic is the global shortage of computer chips. The recovery in auto sales has been stunted by a lack of chips. It's gotten so bad that Ford (F) and General Motors (GM) have been forced to scale back production, as have many European and Japanese automakers. Video game consoles are in short supply. Even Apple (AAPL) has announced that iPhone sales will be impacted this year by the shortage.

And it may take a while for the industry to right itself. Forecasts from several prominent chipmakers show that the market might not return to normal until late 2022 or even early 2023.

The chip shortage might make things difficult downstream, but it's a virtual guarantee of strong demand for the makers of the chips themselves, such as Taiwan Semiconductor Manufacturing (TSM), the world's largest chip foundry.

Taiwan Semiconductor primarily builds chips designed by others, such as Nvidia, Apple and Broadcom (AVGO). Business has been good, and it should only get better.

"We see TSMC's leadership in chip process technology supporting revenue growth at the high end of its 10%-15% CAGR guidance in the next five years," says CFRA's Hazim Bahari (Buy).

Argus Research analyst Jim Kelleher has a similarly sunny view of the company's prospects.

"We believe that Taiwan Semi is positioned for multiple years of exceptional growth given its multiple drivers in the technology economy," he says. "These include accelerated digitization, which is driving demand for traditional IT products and edge devices such as PCs and smartphones; cyclical drivers such as 5G and the emergence of cloud data center; and long-term drivers such as AI, M2M, internet of things, robotics, and autonomous vehicles."

Furthermore, Kelleher believes "that TSMC's role in the global semiconductor supply chain will continue to expand in the coming years" due to its consistent investment in new capacity.

This is certainly reason enough to consider Taiwan Semiconductor as one of the best stocks to buy for the remainder of 2021, if not longer.

Nucor

  • Industry: Steel
  • Market value: $30.8 billion
  • Dividend yield: 1.5%

Infrastructure spending is one of the biggest themes of 2021, and naturally, this will involve a lot of steel. This brings us to leading American steelmaker Nucor (NUE).

In its own words, Nucor is "the safest, highest quality, lowest cost, most productive and most profitable steel and steel products company in the world."

While there might be a little hyperbole mixed in those words, it's hard to argue with the broader strokes. Nucor is a leader in steel and steel products and is the largest steel recycler in North America. And it has managed to survive and even thrive in what has been a tremendously difficult competitive environment for decades.

Apart from benefiting from the obvious increase in steel demand due to the bump in infrastructure spending, Nucor boasts a few other advantages qualifying it as one of the best stocks to buy going forward. Among them: The Biden Administration has shown a strong preference for buying American, which should put Nucor in a good position relative to larger foreign competitors.

Argus Research analyst David Coleman (Buy) adds that "Nucor has a strong balance sheet and offers a solid dividend that has grown for 48 straight years." He also notes that "from a technical standpoint, the shares are in a bullish pattern of higher highs and higher lows that dates to March 2020."

Rayonier

  • Industry: Timber real estate
  • Market value: $4.9 billion
  • Dividend yield: 2.9%

While infrastructure has done a lot of the driving in 2021, there's more to materials demand than just government spending plans. We're also in the midst of a major bull market in residential housing.

Some of this is due to the pandemic, of course. After a year of lockdowns and restrictions on daily life in the city, suddenly the leafy suburbs seemed a lot more attractive. But the bullish case here goes far beyond the pandemic. The millennials – that generation that we believed would never grow up – are now approaching their 40s and falling into the same lifestyle patterns as prior generations, such as buying homes and moving out of urban centers.

Construction can't keep pace with demand at the moment, which is good news for lumber and forestry products companies such as Rayonier (RYN). Rayonier is a timber REIT that owns or manages 2.7 million acres of timberlands, primarily in North America. The shares have been trending higher since September of last year.

The housing boom is particularly strong in the United States, but Rayonier has other opportunities as well.

"Management remains very bullish regarding sawlog demand from China going forward thanks, in part, to China's ban on sawlog imports from Australia," says Raymond James timber analyst Buck Horne. "This policy change doesn't appear to be changing anytime soon and is creating pricing tension, particularly at Rayonier's New Zealand timberland assets."

In other words, demand from China remains high at a time when Rayonier's chief competitor is largest offline. Not bad.

Prologis

  • Industry: Industrial real estate
  • Market value: $95.3 billion
  • Dividend yield: 1.9%

Again, we know that Amazon.com is taking over the world. This isn't really up for debate. But there are more ways to benefit from this trend than simply buying Amazon stock.

Why not own Amazon's landlord?

Prologis (PLD) is the industry leader in logistics real estate and a major landlord to Amazon and other e-tailers. They own the gritty warehouses and distribution facilities that make the modern world work. Quite simply, there would be no internet commerce without the real-economy assets that support it, and that's exactly what makes Prologis one of the best stocks to buy for the rest of 2021 and beyond.

"As the sector leader, we believe Prologis is well positioned to record impressive growth over a multi-year period as the e-commerce/logistics boom continues to rapidly expand," say Raymond James analysts William Crow, Alexander Sierra and Ronak Patel, who rate the stock at Strong Buy.

About that: 2.5% of the world's GDP already flows through Prologis properties. Stop and think about how truly remarkable that is. World GDP was estimated at $85 trillion last year. That means more than $2 trillion in inventory passes through the company's properties every year, and that number is growing.

"We actually haven't had a new idea since 1999," Prologis Chairman and CEO Hamid Moghadam recently said. Prologis was an early investor in the logistics of e-commerce, and it's been riding that trend for more than two decades. And it's likely it will ride those trends for decades into the future.

Microsoft

  • Industry: Software
  • Market value: $2.2 trillion
  • Dividend yield: 0.8%

Lost Generation writer F. Scott Fitzgerald once wrote that "there are no second acts in American lives."

Generally, the same applies to technology companies. It's rare to find a technology company that is successfully able to reinvent itself. Genius rarely strikes twice.

Microsoft (MSFT) is one of those precious few exceptions.

Microsoft created the global office of the 1990s and 2000s with its Windows operating system and Office productivity suite. But the company missed the mobile revolution and seemed destined to slowly fade into obscurity.

And then the cloud happened.

Microsoft CEO Satya Nadella was an early mover in cloud computing, seeing the success of Amazon Web Services. He has since built Microsoft into Amazon's biggest competitor in the cloud while also successfully transitioning Microsoft away from its old software-as-a-product model to its modern software-as-a-service model.

MSFT has been one of the best big stocks of the past half-decade as a result. Shares have risen by a factor of five over the past five years, and they have shown no indication of slowing down.

"We continue to believe that the pandemic is forcing organizations of all sizes to accelerate the pace of their respective cloud migrations and that MSFT should continue to be a key beneficiary," say Stifel analysts Brad Reback and Adam Borg (Buy).

Exxon Mobil

  • Industry: Integrated oil and gas
  • Market value: $240.6 billion
  • Dividend yield: 6.0%

By some measures, the S&P 500 is as expensive today as it was during the frothy days of the 1990s tech bubble. But there are still a few reasonable bargains out there.

As a case in point, consider energy supermajor Exxon Mobil (XOM).

Not all that long ago, Exxon was considered the bluest of blue chips and the largest company in the world by market cap. But a major multiyear supply glut in crude oil had a way of humbling the entire energy, including big boys such as Exxon. The stock is currently down by more than 40% from its pre-glut 2014 highs.

But remember, this isn't Exxon's first energy crisis. This is a company that survived the embargo of the 1970s and the supply glut of the 1980s and '90s. And the company made it through the COVID bear market – including the swoon that saw crude oil prices briefly go negative.

Exxon's shares have been trending higher since November of last year with little sign of slowing down. And importantly, they're still cheap, trading at a forward P/E ratio of just 12 and yielding nearly 6%.

XOM, then, is one of the best stocks to buy for the rest of 2021 and beyond if you like a good bargain.

Retail Opportunity Investments

  • Industry: Retail real estate
  • Market value: $2.1 billion
  • Dividend yield: 2.5%

Few things got hammered as hard during the pandemic as small retailers. And by proxy, their landlords took a hit as the retailers couldn't pay their rent.

This was the situation facing Retail Opportunity Investments (ROIC). ROIC is a real estate investment trust that primarily owns neighborhood shopping centers, many of which were anchored by grocery stores. Naturally, most grocery stores did well during the pandemic. But many of the smaller tenants really struggled, and in the pits of the COVID lockdowns, ROIC was forced to temporarily eliminate its dividend during the lockdowns.

But in the months that have passed, the REIT has reinitiated its dividend, and its stock is definitely on the upswing. The shares are up about 200% from their pandemic lows.

There's good reason to expect that momentum to continue; 97% of its space is under lease, down only 1% from pre-pandemic levels. ROIC's stock price has essentially recovered to its pre-pandemic. But remember, most stocks are well above their old highs, so Retail Opportunity Investments has some serious catching up to do.

Berkshire Hathaway

  • Industry: Diversified insurance
  • Market value: $636.6 billion
  • Dividend yield: N/A

An investment in Warren Buffett's Berkshire Hathaway (BRK/B) is an investment in America.

That's not just hyperbole. Apart from the company's high-profile positions in Apple, Bank of America (BAC) and Coca-Cola (KO), among others, Berkshire boasts a vast and sprawling empire of wholly owned companies and brands we know and love: Acme Brick Company, the BNSF railroad, Fruit of the Loom. Berkshire even owns Dairy Queen, a staple of small-town America, ostensibly because Mr. Buffett likes their ice cream.

Berkshire Hathaway, like much of middle America, took its licks during the pandemic. But as America continues to see its economy normalize, Berkshire's portfolio companies should continue to recover nicely.

Few analysts cover Berkshire, but UBS analysts Brian Meredith, Sheila Seetharaman and Weston Boomer rate it a Buy, saying "We remain constructive on BRK, which we believe is well-positioned to benefit from macroeconomic growth through its cyclical businesses … where we are anticipating a strong rebound as the economy reopens."

Thus, the Oracle of Omaha's holding company belongs among the best stocks to buy for the rest of 2021.

Charles Sizemore was long AMZN, EPD, KMI, LYB, MSFT and O as of this writing.

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