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Macro View

With the S&P 500 down more than 6% since May 1, the old adage of "sell in May and go away" looks remarkably prescient once again.

And with bond rates continuing to rise in Spain and Italy despite a bailout agreement being reached, and with economic growth in China decelerating and a string of disappointing jobs data in the U.S., this could be another summer of poor stock market returns.

The "sell in May" part may be easy. But the question then becomes "and go where, exactly?"

The 10-year Treasury note yields just 1.6% - below the rate of inflation. Savings and money market accounts are yielding even less. That means that you're earning a negative real return on your money.

That's no way to build wealth.

Not All Stocks Are Down

Although most stocks have been negatively affected by the recent selloff, there are corners of the market that have held up remarkably well.

Listed below are 3 stocks that have performed very well during the recent pullback. And each one yields more than 3%, providing you with solid income to go along with that stability.

3 Stocks Weathering the Storm:

Spectra Energy Partners (SEP - Snapshot Report) - Snapshot Report)

Spectra Energy is a master limited partnership that owns and operates natural gas pipelines and storage assets in the United States. The partnership generates mostly fee-based income, so it is not particularly prone to fluctuations in natural gas prices.

This has allowed Spectra to raise its distribution 18 straight quarters since going public back in 2007 (even during the Great Recession). It currently yields a solid 6.2%.

Shares have held up relatively well over the last several weeks. And with a beta of just 0.2, look for more stability going forward.

National Health Investors Inc. (NHI - Snapshot Report) - Snapshot Report)

A sovereign debt crisis in Europe has very little bearing on long-term health care facilities here in the United States. This must be why shares of NHI have been essentially flat since May 1 while the S&P has fallen more than -6%.

National Health Investors is a real estate investment trust that invests in health care properties primarily in the long-term care and senior housing industries. It has investments in 127 facilities in 24 states.

NHI also pays a dividend that yields 5.2%, which has provided support for the stock.

Kimberly-Clark Corporation (KMB - Analyst Report) - Analyst Report)

Not only has this high quality, low beta stock held up during the recent pullback, shares recently hit a new 52-week high as investors flee to quality.

The company delivered a solid earnings beat back in April and continues to generate solid, stable free cash flow. This has allowed it to pay a dividend that yields 3.6%. And over the last 10 years, it has increased it at a compound annual rate of 9%.

Kimberly-Clark does have exposure to Europe, and management warned that they "expect economic conditions to remain challenging" there. But the company's portfolio of consumer staples leaves it much less exposed to economic fluctuations than other companies.

The Bottom Line

Don't let the recent market volatility scare you away from all stocks. These 3 have held up very well so far and looked poised to continue weathering the storm.

Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.


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