Bank of America's 10 Top S&P 500 Stocks to Buy for 2015

NEW YORK (TheStreet) - What stocks should you buy in 2015? Bank of America Merrill Lynch (BAC) analysts culled through S&P 500 stocks picked 10 for 2015 -- one stock for each of the 10 S&P 500 global industry classification standard sectors.

In choosing the list, the analysts used the following criteria to pick the names:

S&P 500 stocks which are BofA buy-rated; assessed company metrics like earnings stability, size, tenure, potential for self-help, active fund ownership vs. S&P 500 weighting, valuation, dividend stability/dividend growth potential, earnings-per-share expectations, among others; and analysts' fundamental views of each company.

Bank of America Merrill Lynch's 2014 list had a total return of 14.5% from Dec. 6, 2013 through Dec. 11 of this year, according to a research note. The S&P 500 rose 12.7% in the same time frame. Two of the stocks on this year's list are repeats from last year -- General Motors  and Exxon Mobil.

Will the 2015 stock list do any better? Check out which companies made BofA's list.

 

General Motors (GM)

Sector: Consumer Discretionary

Year-to-date return: -24%

 

Bank of America Merrill Lynch said:

-- Very inexpensive mega-cap;

-- Healthy yield with potential to grow dividends;

-- Lower gasoline prices helps mix as consumers buy bigger vehicles.

 

Wal-Mart Stores (WMT)

Sector: Consumer Staples
Year-to-date return: 6.2%

 

Bank of America Merrill Lynch said:

-- Underowned high quality mega-cap;

-- Healthy yield with potential to grow dividends;

-- Lower gasoline prices disproportionately help low income consumers.

Exxon Mobil (XOM)

Sector: Energy
Year-to-date return: -13.9%

Bank of America Merrill Lynch said:

-- Underowned, inexpensive mega-cap with 100+ yr history;

-- One of the highest quality Energy stocks by low EPS variability;

-- Less sensitive to oil prices vs. rest of Energy sector;

Healthy yield with potential to grow dividends.

 

Unum Group (UNM)

Sector: Financials

Year-to-date return: -8.7%

Bank of America Merrill Lynch said:

-- Underowned, inexpensive and high quality with 100+ yr history;

-- Strong FCF generation and cash return to shareholders;

-- Near term risk to Long Term Care appears manageable.

Pfizer Inc. (PFE)

Sector: Health Care

Year-to-date return: 0.85%

Bank of America Merrill Lynch said:

-- Underowned, high quality mega-cap with 100+ yr history;

-- Attractive/growing dividend yield at inexpensive price tag;

-- Balance sheet strength should allow PFE to invest in its pipeline.

 

General Electric (GE)

Sector: Industrials
Year-to-date return: -12.6%

Bank of America Merrill Lynch said:

-- Underowned, inexpensive, high quality with solid yield & 100+ yr history;

-- Industrial segment expected to deliver double-digit EPS growth through

-- 2016, helped by late-cycle business mix and restructuring.

Intel Corporation (INTC)

Sector: Information Technology
Year-to-date return: 38.9%

 

Bank of America Merrill Lynch said:

-- Underowned, inexpensive, high quality "old Tech" with net cash;

-- Healthy yield with potential to grow dividends;

-- Beneficiary of stabilizing PC market and long-term growth in servers;

-- Well-positioned to take advantage of Internet of Things and Big Data/Cloud.

 

Alcoa (AA)

Sector: Materials
Year-to-date return: 41.3%

 

Bank of America Merrill Lynch said:

-- Underowned mega-cap with 100+ yr history;

-- Good cash flow outlook;

-- Aluminum forecasts suggest upside to expectations.

 

Verizon Communications (VZ)

Sector: Telecom Services
Year-to-date return: -7.8%

 

Bank of America Merrill Lynch said:

-- Underowned, inexpensive mega-cap with 100+ yr history;

-- High dividend yield and dividend growth potential.

NextEra Energy (NEE)

Sector: Utilities
Year-to-date return: 16.9%

 

Bank of America Merrill Lynch said:

-- Underowned, high quality large cap with strong cash flows;

-- Superior dividend growth rate;

-- Above average rate base growth.


- Written by Laurie Kulikowski in New York.

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