Consider these 3 names with low volatility in a mixed market
How investors deal with volatility in the markets is ultimately what will determine their long-term success. We recently dealt with some of the best years in stock market history, which is why many are having a hard time adjusting to the challenging market conditions that occur so far in 2022. While it is difficult to say how long the volatility will last, solid evidence To handle big moves to the downside and take advantage of stocks that tend to perform well in the “risk off” bar is a basic strategy to work on.
If you’re interested in a good place to start, perhaps one of the best ways to deal with volatility is to focus on low-key demo names that tend to hold up well during downturns in the market. These stocks are ideal for conservative investors and in the long run tend to provide consistent dividends for shareholders, which means adding stocks even when they are declining can lead to a profitable long-term investment.
We’ve compiled a list of 3 stock picks for conservative investors below to help you gain insight into the types of names to explore adding to in such a challenging market.
Consumer staples companies like PepsiCo tend to hold up well during bouts of volatility, which is certainly one of the bright spots in a weak market at this time. As one of the world’s largest food and beverage companies, PepsiCo’s diverse portfolio of products has helped it become a true global force. The company is expected to generate organic growth in sales as the economy continues to open, while a focus on expanding its health product offerings could be another strong driver of growth in the near term.
Consumer preferences are changing to favor these types of healthy snack foods, and PepsiCo products such as Sabra Hummus, Baked Lays and Bubly sparkling water are telling investors that company management understands the growth potential there. There’s also a lot to like about PepsiCo’s defensive qualities because the company will see demand for its products in just about any economy. Finally, a beta of 0.66, a history of earnings growth, and a stock buyback program make this an ideal choice for conservative investors to consider.
Berkshire Hathaway Corporation (NYSE: BRK.B)
Nothing says a museum like insurance companies, and Berkshire Hathaway is probably one of the best stocks to consider owning for exposure to this industry. It’s also nice to own a stock because you have legendary investor Warren Buffett at the helm, which should definitely give investors some extra confidence that their capital is in good hands. In addition to insurance, Berkshire Hathaway is a holding company that also offers rail services, financial services, energy, retail, manufacturing and more, which is a strong selling point to consider.
What’s also nice here is that the company generates a lot of cash every quarter thanks to its business model, which is in turn invested in new acquisitions over the years. Conservative investors should look at companies with a great deal of financial strength, and Berkshire’s balance sheet is arguably one of the best in the market thanks to over $149 billion in cash and short-term investments as of September 30, 2021. The stock is currently crashing higher Its all-time levels are in a challenging market environment, which tells us that investors are interested in adding stocks amid the volatility.
Finally, we have a low-volatility stock that could run into a solid year beyond an uninspiring 2021. Walmart is the world’s largest retailer, operating a chain of more than 11,000 department stores, wholesale clubs, supermarkets, and supermarkets. We know consumers will focus on price-conscious shopping this year given all the reports of rising inflation, which bodes well for Walmart’s earnings. There’s also a lot to like about the company’s e-commerce offering Walmart+, which should lead the company to gain more customers from competitors in the coming years.
Walmart also has a long history of increasing dividend payments, which tells us that it is a well-managed company with enough financial stability to continue rewarding shareholders over the years. The company saw its sales increase from the third quarter by 9.2% year over year, and is gearing up for a strong quarter thanks to the holiday shopping season. With a beta value of 0.52 and a variety of merchandise that consumers will always be interested in purchasing, Walmart is definitely the best pick for conservative investors to consider.
Walmart is part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and operated by entrepreneurs.