While it’s generally good to be optimistic, in the market, it also pays to be realistic, thus incentivizing consideration for cash-rich stocks to buy. Here, we’re not necessarily talking about the most exciting ventures available. Rather, we’re targeting enterprises that have plenty of green-colored paper in the bank. This way, these cash-imbued entities can weather whatever storms might break out.
At the same time, it doesn’t make too much sense to have plenty of cash if you’re also waist-deep in debt. In addition, investors should exclusively target cash-rich stocks if it means their money will go absolutely nowhere. Therefore, I included various attributes into this discussion beyond just owning plenty of currency.
Primarily, each of these companies have zero debt on their books. As well, they feature analyst price targets (at time of writing) that all imply double-digit percentage returns. Without further ado, below are the cash-rich stocks to buy for uncertain times.
Cash-Rich Stocks: Monster Beverage (MNST)
While Monster Beverage (NASDAQ:MNST) may be caffeine-rich, investors may not realize that it’s also one of the cash-rich stocks. As of the third quarter of 2022, the company carried $1.3 billion in cash and its equivalents. As well, it carried $1.35 billion worth of marketable securities. Therefore, its total liquid assets amounted to $2.65 billion. Notably, its total liabilities amounted to only $1.39 billion.
In addition, the company enjoys many other fiscal attributes. Naturally, Monster Beverage commands excellent stability in the balance sheet, particularly its Altman Z-Score of 26.49 reflecting extremely low bankruptcy risk. Its three-year revenue growth rate stands at 15.3%, outpacing 85.56% of the competition. Also, its net margin stands at 19.46, above 92.52% of the industry.
Not surprisingly, Wall Street analysts peg MNST as a consensus strong buy. Further, their average price target stands at $113.36, implying over 10% upside potential. Therefore, it may well be a no-brainer among cash-rich stocks to buy.
Cash-Rich Stocks: Gilead Sciences (GILD)
One of the top biopharmaceutical companies, Gilead Sciences (NASDAQ:GILD) for the most part enjoyed a quiet cycle in 2022. However, late last year, strong demand for its cancer drug skyrocketed GILD stock. In the trailing year, shares gained over 38% of equity value. However, it’s off to a less-auspicious start for 2023, declining over 3%.
Nevertheless, investors may want to keep tabs on GILD because it ranks among the cash-rich stocks to consider. As of the fourth quarter of 2022, the company carried a total liquid asset count of $7.63 billion. Further, total assets amounted to $63.2 billion, while total liabilities came out to nearly $42 billion. In addition, Gilead was free cash flow (FCF) positive at $2.57 billion.
Notably, despite its market momentum, Gilead pings as objectively undervalued. Currently, the market prices GILD at a forward multiple of 12.13. As a discount to earnings, the biopharma ranks better than 73.11% of its rivals.
Finally, covering analysts peg GILD as a consensus moderate buy. As well, their average price target stands at $92.33, implying nearly 12% upside potential.
Cash-Rich Stocks: Marathon Petroleum (MPC)
With the cynical combination of soaring inflation and geopolitical flashpoints, Marathon Petroleum (NYSE:MPC) practically had nowhere to go but up. Over the trailing year, MPC gained almost 69%, a staggering performance. Also, momentum remains robust in the new year, with shares moving up over 13% since the January opener.
Despite its massive upside, investors may want to give Marathon another look because it ranks among cash-rich stocks. Looking at the company’s Q4 2022 disclosure, Marathon carried $8.63 billion in cash and its equivalents. Also, it had $3.15 billion in marketable securities. In total, its liquid assets amounted to $11.8 billion. During Q4, Marathon pinged as FCF positive at $1.81 billion.
Interestingly, MPC rates as undervalued. Objectively, the market prices MPC at a trailing multiple of 4.39. As a discount to earnings, Marathon ranks better than nearly 71% of the competition.
Lastly, covering analysts peg MPC as a consensus strong buy. Further, their average price target stands at $142.60, implying almost 14% upside potential.
Taiwan Semiconductor (TSM)
Admittedly, mentioning Taiwan Semiconductor (NYSE:TSM) on this list of cash-rich stocks to buy presents significant risks. With seemingly everyone wanting to blow each other up these days, Taiwan stands on shaky ground. That’s not exactly confidence inspiring when it comes to investments to depend on during the troubles.
At the same time, it’s quite possible that China will not be as imprudent as its neighbor Russia. Therefore, Taiwan Semiconductor may be incredibly undervalued. One thing’s for sure: TSM ranks among the cash-rich stocks. Per the company’s Q4 earnings report, the company commanded $50.94 billion in cash and its equivalents. As well, total liabilities amounted to only $30.8 billion.
In addition, the market prices TSM at a forward multipole of 16.44. As a discount to earnings, Taiwan Semiconductor ranks better than 65.52% of the industry. As well, the technology firm enjoys excellent revenue growth and net profitability metrics.
Turning to the Street, covering analysts peg TSM as a consensus strong buy. Further, their average price target stands at $104.33, implying nearly 16% upside potential.
As one of the supermajors in the global hydrocarbon space, Chevron (NYSE:CVX) needs no introduction. Moreover, it needs no explanation for why CVX bounced dramatically higher. For instance, in the trailing year, CVX gained 20% of equity value. And that’s inclusive of a 7% loss since the January opener. Fears of potentially greater inflation from China’s reopening along with geopolitical jitters should keep things interesting at Chevron.
Still, investors should target CVX for any concerns they have because it’s one of the cash-rich stocks to buy. According to its Q4 2022 earnings report, the company carried $17.7 billion in cash and its equivalents. As well, it had $223 million in marketable securities. This gave the company a total liquid asset count of $17.9 billion.
In addition, Chevron enjoys broad fiscal strengths. Naturally, it features excellent stability in the balance sheet. Operationally, its three-year revenue growth rate pings at 18.1%, outpacing 81.81% of its peers. Its net margin is 15%, above 68% of the competition.
Looking to Wall Street, covering analysts peg CVX as a consensus moderate buy. In addition, their average price target stands at $190.23, implying over 17% upside potential.
A consumer goods giant, Unilever (NYSE:UL) enjoys broad fundamental relevancies. Essentially, no matter what’s going on with the economy, people need certain basic goods. That’s exactly where Unilever comes in, feeding everyday demand. It’s not glamorous but during down cycles or moments of uncertainty, UL commands plenty of confidence.
In addition, it’s one of the top cash-rich stocks to buy. According to its Q4 2022 earnings report, Unilever’s cash and its equivalent line item reached $4.58 billion. As well, the company had $1.27 billion worth of marketable securities. All told, its liquid asset count came out to $5.85 billion. The company was FCF positive to the tune of $3.39 billion.
For other fiscal attributes, Unilever represents a slow-and-steady player. For instance, its three-year revenue growth rate pings at 6.8% – not bad, not great. However, its net margin stood at 12.74%, which ranks above 86% of the industry.
Finally, covering analysts peg UL as a consensus moderate buy. Further, their average price target stands at $60, implying over 18% upside potential.
A precious metals firm, Franco-Nevada (NYSE:FNV) specializes in gold-focused royalty and streaming businesses. Rather than mining the assets, Franco-Nevada provides upfront capital to mining firms in exchange for either a percentage of sales (royalty) or a cut of the physical precious metals (streaming). To be fair, the metals industry represents a volatile sector. However, the fear trade could bolster FNV.
One factor to consider of course is that Franco-Nevada ranks among the cash-rich stocks. According to its latest earnings report (Q3 2022), the company had $1.06 billion in cash. Notably, its total liabilities count measured only $192 million. Moreover, Franco-Nevada was FCF positive to the tune of $229 million.
Operationally, the company enjoys substantial strengths. Its three-year revenue growth rate stands at 22.7%, outpacing 82.91% of its peers. Further, its net margin pings at 57.14%, above nearly 95% of the underlying segment.
Lastly, Wall Street analysts peg FNV as a consensus hold. However, their average price target stands at $154.29, implying nearly 24% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.