When the chapter was officially closed on 2024, the bulls reigned supreme yet again. The ageless Dow Jones Industrial Average, widely followed S&P 500, and growth-dependent Nasdaq Composite respectively rose by 13%, 23%, and 29% for the year, with each index reaching numerous all-time closing highs.
Despite these phenomenal gains, bargains can still be found for opportunistic investors willing to seek them out.
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Best of all, putting your money to work on Wall Street has become progressively easier as time has passed. Most online brokerages have removed minimum deposit requirements and commission fees, with some even allowing for fractional share purchases. This means any amount of money -- even $1,000 -- can be the perfect amount to put to work.
If you have $1,000 that's ready to invest right now, and this is cash you're certain won't be needed to pay bills or cover an emergency, the following three outstanding stocks stand out as no-brainer buys for the new year.
NextEra Energy
Though tech stocks have been all the rage on Wall Street over the last two years, 2025 looks to be shaping up as a stock picker's market. With the S&P 500 at one of its priciest valuations stretching back more than 150 years, the safety of returns provided by electric utility NextEra Energy (NEE 0.53%) makes it a no-brainer buy right now with $1,000.
One of the obvious benefits of electric utilities is they provide a basic necessity. If you own or rent a home, you need electricity to power your appliances and/or HVAC system. Demand for electricity doesn't change much from one year to the next, which leads to highly predictable operating cash flow.
To add to this point, most utilities operate as monopolies or duopolies in the areas they service. The exceptionally high cost of getting infrastructure in place means NextEra Energy doesn't have to worry about competition or losing customers.
But what really separates this company from the dozens of other publicly traded electric utilities is its renewable energy focus. There isn't a utility in the world which is generating more capacity from wind and solar power than NextEra. Out of its roughly 72 gigawatts (GW) of capacity, close to half can be traced to renewable sources.
This green-energy shift comes with a number of advantages. For instance, it's demonstrably lowered the company's electricity generation costs, which in turn has led to sustained high-single-digit earnings per share (EPS) growth and double-digit annual growth in its dividend. Additionally, if Washington, D.C., mandates cleaner fuel sources for utilities, NextEra will be well ahead of the game.
NextEra Energy isn't taking its foot off the accelerator, either, even with borrowing costs notably rising from where they were three years ago. From 2024 through 2027, the company anticipates bringing 36.5 GW to 46.5 GW of new renewable and storage projects online.
NextEra stock is historically cheap, as well. Its forward price-to-earnings (P/E) ratio of less than 20 marks a 22% discount to its average forward P/E ratio over the trailing-five-year period.
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Baidu
A second top-tier stock that makes for a no-brainer buy with $1,000 in the new year is China-based internet search goliath Baidu (BIDU 1.49%). Although President-elect Donald Trump's November victory has weighed on China stocks -- Trump has said he plans to institute a 35% tariff on Chinese imports on his first day in office -- Baidu's multiple avenues of growth and its valuation make it tough to ignore.
Baidu's core revenue driver continues to be its internet search engine. Based on data from GlobalStats, Baidu accounted for a 45.2% share of internet search in the world's No. 2 economy in November 2024, and has consistently maintained a 45% to 85% share of China's internet search market looking back a full decade. Being the go-to choice for businesses to advertise their products and services should afford Baidu substantial ad-pricing power as China's economy regains its footing following the pandemic.
However, Baidu's most-promising growth prospects are expected to come from the artificial intelligence (AI) revolution.
For instance, it's one of the four-largest providers of cloud infrastructure services in China. Incorporating generative AI solutions such as Ernie to build and train large language models should accelerate sales growth for the company's enterprise cloud solutions and meaningfully boost the company's margins. Baidu notes that Ernie handled 1.5 billion application programming interface (API) calls (i.e., requested tasks) per day in November, up from 600 million in August.
Additionally, intelligent driving segment Apollo Go remains the premier autonomous ride-hailing service in China. Apollo Go provided 988,000 rides during the third quarter, which pushed lifetime autonomous rides to north of 8 million since inception.
On top of AI likely improving the company's margins in the quarters to come, Baidu's balance sheet is flush with cash. Inclusive of short-and-long-term investments, cash, cash equivalents, and restricted cash, Baidu is nearing $30 billion in net capital. This gives it the luxury of conducting share buybacks that can boost EPS.
Similar to NextEra Energy, Baidu stock is also historically inexpensive. It shares are valued at a 12% discount to book value and trade at just 8 times forward-year EPS.
Annaly Capital Management
The third no-brainer stock to buy with $1,000 right now for the new year is mortgage real estate investment trust (REIT) Annaly Capital Management (NLY 3.26%). Annaly has declared $27 billion in dividends since its initial public offering in October 1997 and is currently dishing out an annual yield of almost 14%. For those curious, the company has averaged a yield of around 10% over the last two decades.
Mortgage REITs are companies that aim to borrow money at low short-term rates and use this capital to purchase higher-yielding long-term assets, such as mortgage-backed securities (MBS). The difference between the average yield on the assets they own less their average borrowing cost equals their "net interest margin." The higher the net interest margin for mortgage REITs, the more profitable they usually are.
For years, mortgage REITs like Annaly have been almost universally disliked by Wall Street analysts. This is because the mortgage REIT industry is highly sensitive to changes in interest rates. The Federal Reserve's rapid rate-hiking cycle between April 2022 and July 2023 put a dent in Annaly's net interest margin and its book value (mortgage REITs often trade close to their respective book value).
What changes the story for Annaly is that the nation's central bank has shifted course and is now undertaking a rate-easing cycle. Historically, Annaly and its peers perform their best when interest rates are declining. This scenario allows the company to borrow at lower short-term rates, while still packing its asset portfolio with higher-yielding MBSs. This should lead to higher net interest margin in the coming years.
Another key selling point for Annaly Capital Management is that it predominantly invests in agency assets. As of Sept. 30, $72.5 billion of its $81.8 billion portfolio was put to work in highly liquid agency securities. An "agency" security is backed by the federal government in the unlikely event of a default on the underlying asset. Though this added protection lowers the yield Annaly generates on the agency MBSs it holds, it also gives the company the ability to lever its investments to pump up its profit potential.
To keep with the theme, Annaly Capital Management's valuation is intriguing. As of the closing bell on Jan. 3, shares of the company were valued at a 3% discount to its book value, which makes for an attractive entry point for opportunistic income seekers.
