The midpoint of the year finds U.S. equities contending with pressures on earnings and clouded by an ambiguous economic outlook, Barclays said in a report examining investing prospects for the remainder of the year.
"The U.S. looks more fully priced than other markets at a time when earnings growth has slowed and the Fed looks set to raise interest rates," Barclays' equity research team said.
The report anticipates that U.S. stocks will continue to fluctuate around the 2,100 target for the S&P 500 index – the kind of market in which stock picking becomes all that more important.
The report provides Barclays top stock picks for the Americas, highlighting the "best-in-class investment opportunities" from each sector.
The 48 stocks together offer up to 40-per-cent upside, under ideal conditions. The average stock in the group generates a 14.2-per-cent return on equity, trades at a 19.5 times forward price-to-earnings ratio and pays a 1.2-per-cent dividend yield.
Five Canadian stocks made the cut.
Suncor Energy Inc. is better positioned than its peers to weather the low oil price environment, as its stock has been discounted by the "misperception that oil sands production represents the high end of the oil production cost curve," the analysts said. Meanwhile, Vermilion Energy Inc. has a "low-risk growth outlook."
Canadian mining made an appearance on the list with Royal Gold Inc., which can generate growth "even at current gold prices," the report said.
Outside of resources, Manulife Financial Corp. was chosen for its exposure to the strengthening global economy and its high sensitivity to rising interest rates.
Lastly, Valeant Pharmaceuticals International Inc. is a top pick as a result of its underappreciated organic growth prospects, which should built on the company's aggressive growth-by-acquisition record, the report said.
The remaining picks are listed below.