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10 Top-Ranked S&P 500 Stocks Outperforming in 2020

Sweta Killa

Extending last year’s rally, Wall Street has already hit a series of record highs this year, with the S&P 500 breaching the 3.300 level for the first time. The latest rally has been powered by Q4 earnings optimism and the initial U.S.-China trade deal.

Under the terms of the phase one trade deal, China has agreed to purchase an additional $200 billion ($52.4 billion worth of energy, $32 billion in agriculture, $37.9 billion in services and $77.7 billion of manufactured products) of U.S. goods and services over the next two years. In return, Washington has agreed to cut half the tariffs on $120 billion in Chinese products from 15% to 7.5%. Also, Senate approval of a new trade deal between the United States, Mexico and Canada supported the stocks.

The Fed’s accommodative interest rate policy and a resilient domestic economy have been driving stocks higher. Lower interest rates will keep borrowing costs down, thereby resulting in higher consumer spending and an upswing in economic activities. The U.S. economy has been witnessing steady growth backed by a strong job market, a recovering housing market and higher consumer confidence. A technology surge is also adding to the strength. Though Middle East tensions have resulted in some volatility in early 2020, it has abated for now.

That said, the rally has been broad based and there are winners across various corners of the space. We have highlighted stocks that have shown strong momentum to start 2020 and carry a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Here are a bunch of those that are easily leading the way on the S&P 500 Index and should continue to outperform for the rest of the month given their superior fundamentals. You can see the complete list of today’s Zacks #1 Rank stocks here.

McKesson Corporation MCK – Up 11.4%

With a market cap of $27.7 billion, McKesson Corporation is a health care services and information technology company. The company saw positive earnings estimate revision of 8 cents for the fiscal year (ending March 2020) over the past month with an expected earnings growth rate of 6.63%. It has a Zacks Rank #2 and VGM Score of A.

Mylan N.V. MYL – Up 9.7%

It is a global pharmaceutical company with a well-established generics business and presence in specialty pharmaceuticals. The stock saw positive earnings estimate revision of a couple of cents for 2020 over the past month with an expected earnings growth rate of 4.05%. Mylan has a market cap of $11.4 billion and carries a Zacks Rank #2. It flaunts a VGM Score of A.

Lockheed Martin Corporation LMT – Up 8.1%

It is the largest defense contractor in the world. The stock saw no estimate revision for 2020 over the past month and has an estimated earnings growth rate of 12.19%. LMT has a market cap of $118.7 billion and carries a Zacks Rank #2. Its VGM Score currently stands at B.

T. Rowe Price Group Inc. TROW – Up 6.8%

This global investment management organization provides a broad array of mutual funds, sub-advisory services and separate account management for individual and institutional investors, retirement plans and financial intermediaries. The stock saw solid earnings estimate revision of 30 cents for 2020 over the past month and has an expected growth rate of 5.54%. It has a Zacks Rank #2 and VGM Score of B. T. Rowe has a market cap of $30.4 billion.

Global Payments Inc. GPN – Up 6.5%

This is a leading provider of scheduled air transportation for passengers and cargo throughout the United States and around the world. With a market cap of $58.4 billion, the stock witnessed positive earnings estimate revision of a penny for 2020 in the past two months and has estimated earnings growth of 22.5%. The stock has a Zacks Rank #2 and VGM Score of B.

Lamb Weston Holdings Inc. LW – Up 5.6%

Lamb Weston is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. The stock saw positive earnings estimate revision of 5 cents for the fiscal year (ending May 2020) over the past month with an expected earnings growth rate of 8.7%. It has a market cap of $13.3 billion and carries a Zacks Rank #2. The stock has a VGM Score of B.

Delta Air Lines Inc. DAL – Up 5.4%

This is a leading provider of scheduled air transportation for passengers and cargo throughout the United States and around the world. Though it saw positive earnings estimate revision of 8 cents for 2020, its earnings are expected to decline 0.96% from the year-ago level. The stock sports a Zacks Rank #1 and VGM Score of A. It has a market cap of $39.8 billion.

H&R Block Inc. HRB – Up 4.5%

It is a leading provider of tax preparation services. With a market cap of $4.8 billion, the stock witnessed solid earnings estimate revision of 44 cents for the fiscal year (April 2020) in the past two months and has estimated earnings growth of 13.95%. The stock has a Zacks Rank #1 and VGM Score of B.

DENTSPLY SIRONA Inc. XRAY – Up 4.4%

It is a global leader in the design, development, manufacture and marketing of dental consumables, dental laboratory products, dental specialty products and consumable medical device products. The stock witnessed positive earnings estimate revision of a penny for 2020 in the past month and has estimated earnings growth of 10.4%. The stock has a Zacks Rank #2 and VGM Score of B. It has a market cap of $13.1 billion.

Raytheon Company RTN – Up 4.4%

It is one of the largest aerospace and defense companies in the United States with a diversified line of military products, including missiles, radars, sensors, surveillance and reconnaissance equipment, communication and information systems, naval systems, air traffic control systems, and technical services. The stock saw no estimate revision for 2020 over the past month and has an estimated earnings growth rate of 8.35%. Raytheon has a market cap of $63.9 billion and carries a Zacks Rank #2. Its VGM Score currently stands at B.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.” Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.