As we draw into the final weeks of an unforgettable 2020, with a new year, a new Presidency (probably) and a hope that the next year will bring some semblance of post-covid-19 normality, now is a great time to review your stock portfolio.
Keeping your stock portfolio balanced is not a new concept. Balancing or rebalancing is a concept most traders and investors should be familiar with.
A “balanced stock portfolio” is simply a strategy used by most investors seeking to balance their investment earnings against the risk of losing money. This is achieved by investing in a mix of stocks with different levels of risk, reward and varying levels of exposure to market volatility.
To really balance an investment portfolio, it is recommended to invest in bonds that offer low yield but generally very little risk. However, for this article, we are looking at just stocks to buy that will balance the portfolio.
The Growth Stock: PayPal Holdings (NASDAQ: PYPL)
An essential part of a balanced stock portfolio are the stocks for growth. These stocks are for the future and should be considered for long term investment.
The growth stock that stands out is PayPal Holdings (NASDAQ: PYPL). This may not be the obvious growth stock choice having risen 135% already this year, and priced at around $190 a share, not a cheap option. However, PayPal Holdings (NASDAQ: PYPL) continues to impress and is in an extraordinary growth trajectory. The global lockdowns have been good for online payment processors and this is reflected in PayPal’s share price which simply hasn’t looked back since hitting an annual low of $86 in March.
Earlier this month, PayPal Holdings (NASDAQ: PYPL) posted record quarterly growth, the second consecutive quarter of record-setting results for the company. With crypto adoption to look forward to in 2021, the growth trajectory for PayPal and its stock should only accelerate.
PayPal Holdings (NASDAQ: PYPL) price: $190.90
The Dividend Stock: Verizon Communications Inc. (NYSE: VZ)
Verizon Communications Inc. (NYSE: VZ) the American multinational telecommunications conglomerate is another stock that has rebounded since hitting a March low. Although not as impressive as that of PayPal’s, Verizon’s growth trajectory has been steadily rising since March’s $50 low to today’s $60 price.
However, it is Verizon’s dividend yield which is the most interesting. According to data, Verizon Communications Inc. distributed a $0.6275 dividend per share for the last quarter. This was an increase of 2.03% from the previous dividend. The company’s dividend payout has a five-year CAGR (Compound annual growth rate of 2.51%). The annual dividend yield expected is 4.16%, whilst the four-year average dividend yield is 4.62%.
The New York-based company has been busy in mergers and acquisitions too, which should bode well for future dividends. As well as agreeing to purchase a part of Bluegrass Cellular, a rural wireless operator in Kentucky, Verizon only yesterday (Thursday 19th November) announced that Buzzfeed Inc. is buying Verizon Media’s HuffPost in an all-stock deal.
Verizon Communications Inc. (NYSE: VZ) price: $60.21
