One of the biggest contributing factors for Donald Trump’s electoral victory in 2016 was fear. Like a marketing expert, the then-real estate mogul tapped into underlying industrial blue-collar concerns about job displacement; hence, we heard topics such as coal that haven’t been raised in quite some time. But the overriding reality is that nominally, nothing beats the service sector. Logically, then, you should consider adding services stocks to your portfolio.
If you look at the numbers, it’s not a foreign “other” that’s creating a paradigm shift in the blue-collar workspace. Instead, the advent of technologies such as the internet, digitalization, and e-commerce have sparked massive opportunities in the service sector. According to the U.S. Census Bureau, this entire segment generated $15.5 trillion at the end of 2017. That alone is enough reason to justify pushing services stocks to buy.
It’s also quite telling that a majority of the sub-segments within the service industry are primarily white-collar occupations. Categories like information, finance and insurance, and even arts, entertainment, and recreation produced relatively strong single-digit revenue growth. On the other hand, areas such as utilities, and transportation and warehousing, suffered conspicuous declines.
Unsurprisingly, economic components like the latter two categories are most at risk for automation. Of course, that represents a significant concern for the labor market. However, as an investor toward services stocks, automation can be a wonderful tool to maintain relevancy.
Automation or not, the best part about the service sector is its broad reach. Unlike other lists of stocks to buy, you will almost surely find something to like.
With that, here are seven services stocks to order up for the rest of the year.
Anytime you’re pondering the best stocks to buy, you go where the demand is. In the case of healthcare real-estate investment trust Ventas (NYSE:VTR), no matter how advanced technology becomes, it can never replace the human element involved in senior-living provisions. Although this segment has been quite choppy in recent years, VTR stock shows significant fundamental promise.
For one thing, we’re on the cusp of a dramatic demographic shift. Following the end of World War II, people got, well, busy. That resulted in an unprecedented surge in population size. And because of this dynamic, we’re seeing 10,000 Americans turn 65 years old daily. In a few more years, these individuals may consider senior-assisted living, which bolsters the case for VTR stock.
Moreover, Ventas may organically benefit from political tailwinds. Developments within the Medicare Advantage program suggest that seniors will have greater access to federal funds for senior-care residential expenses. This implies a greater willingness to use senior services, which obviously assists VTR stock.
Service Corporation (SCI)
I love stocks that focus on the retirement sector. That said, no matter how much we take care of our seniors, they will eventually die. Given this inevitability, we have two choices: we can pretend that death won’t affect us, or we can proactively strategize for it. Either way, you’re going to die too. And this is the brutal investment thesis behind Service Corporation (NYSE:SCI) and SCI stock.
Before we dive in, I must admit that I don’t like buying into shares on a hot streak. Year-to-date, SCI stock is up nearly 19%, thus explaining my hesitancy. Moreover, SCI has exceeded its prior all-time high during the late 1990s. Plus, there are some rumblings about competition threatening the top players. With all that said, I’m long-term bullish.
As I mentioned earlier, it’s a simple and brutal proposition. A recession – if it occurs – won’t stop people from dying. Indeed, it might accelerate deaths nationwide. Cynically, this benefits SCI stock. Furthermore, we have a wave of humanity from the baby boom that will say their last goodbyes. I think there’s more than enough “demand” to satisfy market players.
H&R Block (HRB)
We’ve all heard this adage: nothing is certain but death and taxes. In most cases in which this statement is uttered, it’s a reflection of life’s cruel inevitabilities. But for someone looking for viable services stocks to buy, it’s a brilliant (and free) piece of advice. If you’re squeamish about death care, you should try your hand at tax care with H&R Block (NYSE:HRB) and HRB stock.
As my friend and InvestorPlace colleague Will Ashworth wrote, I see potential with HRB stock. Sure, it’s a tough road. H&R Block doesn’t have the greatest financials. And to Ashworth’s countering arguments, the company faces competitive threats from fintech innovations. But with the massive shift toward the “gig economy,” the demand for HRB’s services will only rise.
Plus, I have a quick word about fintech innovations. I’m a smart guy, but there are two things that drive me insane: deciphering healthcare policies and taxes. Last year, the tax code changed and it was a nightmare to finish my obligatory payments to Uncle Sam. That’s a sentiment shared by many others. The point is, interacting with an app or program is the last thing I want to do on April 15.
In other words, get me a human. Get me HRB stock.
RCI Hospitality (RICK)
When you invest, you really should adopt an agnostic viewpoint: you want to focus on the numbers and the broader fundamentals. With that in mind, when one of the best services stocks to buy is RCI Hospitality (NASDAQ:RICK).
How do I describe the underlying business of RICK stock without triggering unwanted attention? Let’s just say that RCI specializes in upscale rhythmic-gyration establishments. These are services that you’ve never advantaged, but you know many friends that do.
All joking aside, the pulsating action that occurs here is serious stuff. You know what they say about the “intimacy” industry being recession-proof? Nothing is truly recession proof, of course, but this particular service performed remarkably well in the last major downturn. With questions sprouting about the current economy, this is a good reason to buy RICK stock.
The other is that shares are on deep discount. On a YTD basis, RICK stock has lost nearly 19%. However, I don’t see this lasting because of this sector’s obvious demand base.
Match Group (MTCH)
When used correctly and safely, online dating is a wonderful experience for many reasons. Primarily, it’s the culmination of the marriage between technology and tradition. After all, a successful outcome typically leads to expanded families and more humans on the earth.
Secondly, online dating gives dorks like me a chance to do the latter. I have a special place in my heart for Match Group (NASDAQ:MTCH). But does that mean you should buy MTCH stock?
The short answer is yes. Not because of my inability to engage with the opposite sex, but because millions of Americans apparently feel the same. According to the Pew Research Center, attitudes overall toward online dating has shifted positively. Naturally, this is especially true for the young demographic. Because millennials dominate the workforce, this is a key reason supporting MTCH stock.
Another factor bolstering Match’s inclusion among services stocks to buy is rising participation. Approximately 50 million Americans have tried online dating, and most of them are looking for relationships. It’s safe to say that MTCH stock will remain relevant for a very long time.
Without hesitation, I would place Uber Technologies (NYSE:UBER) on any list of services stocks to buy. Because of the rise in technology and automation, we’re at a unique time in human development. Companies are just now executing tech platforms that genuinely help the average person, rather than innovating for innovation’s sake. Due to this one simple fact, I’m long-term bullish on UBER stock.
By now, you’ve all heard of Uber and most likely use it on a frequent basis. But I didn’t really understand the power of this innovation until I recently traveled to eastern Europe. Getting around in the former Soviet bloc is at times a tricky affair, especially if you’re not a local. But with Uber, all critical operation occurred inside an intuitive app: I just needed to show up.
And how could I trust this ride-sharing app in an unfamiliar part of the world? Simple: with Uber, you witness the free market working in real time. If an Uber driver wanted to deliberately harm me, guess what? That person is out of a job that they probably need. It’s this ability to open up new doors is one of many reasons why I’m confident in UBER stock.
MedMen Enterprises (MMNFF)
Decades from now, we’ll look back and recognize green investments as one of the transformative services stocks to buy. No, I’m not talking about the environment, although that’s important too. Rather, I’m talking about marijuana, which now that I think about it is part of the environment. So perhaps the cannabis industry is a win-win for everyone!
Admittedly, that statement is a stretch. But I’m not joking about cannabis stocks to buy. Although they’re going through a rough patch right now, I’m sure they’ll recover. In the meantime, you can pick up great companies on discount. And if you’re a true speculator, you should consider MedMen Enterprises (OTCMKTS:MMNFF) and MMNFF stock.
Why MedMen? With recreational legalization trends gaining electoral steam, MedMen raced to the top tier among marijuana dispensaries. They specialize in a wide range of premium cannabis products from “botanicals” to edibles. And the emphasis on quality is what separates MMNFF stock from the run-of-the-mill dispensary.
During the dark days, merely having access to weed was a plus. Now, with federal legalization probably on the horizon at some point, just having weed isn’t enough; instead, you must have the good stuff. With MedMen establishing a premium brand in marijuana’s nascent stage, I expect MMNFF stock to steadily move higher.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.