Banking

RBC: Buy these 19 stocks that should outperform in the 3rd quarter on the way to upside of at least 20% over the next year

  • RBC is updating its top 30 global stock picks with new cyclical, energy, and material names.
  • It says the leading names offer upside of more than 20% based on their prices and dividends.
  • Since the end of 2019, RBC says the quarterly list has beaten a global benchmark and the S&P 500.
  • See more stories on Insider’s business page.

At the middle of the year and in the middle of a long weekend, you might want to hold off on firing up the grill to rebalance your stock portfolio.

RBC is updating its global top 30 list of recommended stocks as the third quarter gets going. Global Head of Research Grame Pearson, Head of US Research Mark Odendahl, Head of Canadian and Asia-Pacific Research André‐Philippe Hardy, and Head of European Research Michael Hall are taking an even more cyclical tilt.

They’re also cutting loose some stocks that have already outperformed in recent months.

“The changes made to our Top 30 this quarter reflect a rotation out of companies that have seen strong performance and offer less perceived upside, into names that have more attractive upside potential, with increases in our Energy, Materials and Communication Services sector exposure,” they wrote.

The list overweights energy companies based on industry fundamentals and materials companies based on economic growth and commodity exposure. New additions include energy giant ConocoPhillips, retailer Hennes & Mauritz, building materials maker Louisiana-Pacific, and real estate site Zillow Group.

Nike and Dollar Tree were among the stocks dropped from the list.

RBC’s Top 30 has outperformed broad indexes since its creation at the end of 2019, as the basket of stocks has returned 45% as of June 30, compared to 36% for the S&P 500 and 31% for the MSCI All-Country World Net Total Return US Index.

The RBC team chose the stocks based on both their price upside and, in some cases, dividends. The stocks below are organized from lowest to highest in terms of their projected one-year return, a measurement combining both the upside to RBC’s price target with the

dividend yield
of the stocks. Figures were calculated as of June 30.

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