Cramer says he likes these technology and real-estate stocks for 2023

On Wednesday, CNBC’s Jim Cramer highlighted tech and real estate stocks he believes can perform well in 2023, following a dismal year for both sectors.

Rising interest rates have presented challenges for the technology and real estate sectors in 2022. Information technology is down 27% year-to-date, as of Wednesday’s close, while real estate fell by 28.4% over the same period. The only S&P 500 sectors to perform worse were Consumer Discretionary, down 36.2%, and Communication Services, down 40.3%.

Cramer said he thinks technology and real estate will continue to struggle next year; however, the tech might start to see its fortunes improve after the first half of 2023.

Technical choices for 2023

from Oracle results for the second quarter of fiscal 2023 last week were “magnificent,” Cramer said. The stock is selling for less than 17 times forward earnings. Although enterprise software isn’t Cramer’s favorite industry right now, he said Oracle’s business looks “very sustainable.”

Cramer said he likes Broadcom’s diversification strategy, including its ongoing deal to acquire VMware. Broadcom shares also have a dividend yield of about 3.3%, allowing investors to be patient while this acquisition goes through regulatory review, he said. The company also recently announced a $10 billion share buyback program.

Palo Alto Networks is not in the S&P 500. Nonetheless, Cramer said he believes it is the best-run cybersecurity company operating in an industry that has a long lifespan in the digital age. . While Palo Alto Networks reported better than expected results last monthCramer noted that the stock isn’t too far off its 52-week closing low of $142.21 on Nov. 4.

Real estate choices for 2023

Cramer said he likes Realty Income because its major retail tenants — such as Dollar General, Walgreens and 7-Eleven — have businesses that can hold up during a possible recession. “Best of all, this company is a dividend machine; it pays a monthly dividend,” he said, “and tends to increase it several times a year. Currently, the stock is yielding 4.6%. “

While Federal Realty shares have fallen about 25% in 2022, Cramer said the stock has been a strong long-term performer. Its current dividend yield is 4.25%. Cramer said Federal Realty’s specializes in mixed-use properties, many of which are in affluent suburbs. This is remarkable given concerns about a potential recession.

Cramer said the logistics-focused real estate investment trust, or REIT, has continued to deliver strong results, even though its stock has fallen about 31% year-to-date. Cramer said he thinks Prologis shares have fallen enough to start looking attractive.

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Jim Cramer explains why he likes these 3 real estate stocks for 2023

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