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Zacks Investment Ideas feature highlights: H&R Block, Kellogg and American Electric Power
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For Immediate Release
Chicago, IL – August 30, 2022 – Today, Zacks Investment Ideas feature highlights H&R Block (HRB - Free Report) , Kellogg Company (K - Free Report) and American Electric Power Company (AEP - Free Report) .
3 Low-Beta Stocks to Shield Investors from Volatility
Volatility has headlined the market following the Fed's Jackson Hole Economic Symposium. Fed Chairman, Jerome Powell, was rather hawkish in his comments.
Powell believes bringing inflation down will take some time, adding that the plan will, unfortunately, "bring some pain to households and businesses."
Needless to say, the market didn't react well to the comments, as they essentially crushed any hopes that the Fed would soon reverse its rate-hike trajectory.
Pairing these remarks with the fact that we're about to break into September, a historically weak month in the market, gives investors plenty of valid reasons to consider a defense-first approach.
For investors looking to shield themselves against volatility, stocks that carry low betas would provide precisely that.
Stocks with a beta of less than 1.0 are less volatile than the general market, and those with a beta of higher than 1.0 are more volatile than the general market.
Three companies that carry a beta of less than 1.0 include H&R Block, Kellogg Company and American Electric Power Company.
Let's take a closer look at each company.
H&R Block
H&R Block is the world's largest income tax filing company, offering income tax return filing services for salaried individuals via three distinct methods: free online e-filing, assisted tax e-filing, and in-person tax e-filing.
The company carries a beta of 0.69.
In addition, H&R Block's forward earnings multiple resides at a nice 12.2X, representing a steep 42% discount relative to its Zacks Consumer Discretionary Sector. The company carries a Style Score of an A for Value.
HRB has been on an impressive earnings streak, exceeding the Zacks Consensus EPS Estimate in six consecutive quarters. Top-line results have also been robust, with H&R block chaining together ten straight revenue beats.
Furthermore, the company rewards its shareholders via its annual dividend yielding 2.3%, much higher than its Zacks Consumer Discretionary Sector average of 0.9%.
H&R Block has upped its dividend payout four times over the last five years, undoubtedly a major positive.
Kellogg Company
Kellogg Co. manufactures and markets ready-to-eat convenience foods, with a balanced portfolio of cereal and snack products.
Kellogg carries a beta of 0.43.
The company's shares trade at solid valuation multiples, further displayed by its Style Score of a B for Value. K's forward earnings multiple resides at 17.9X, representing a sizable 12% discount relative to its Zacks Consumer Staples Sector.
In addition, Kellogg's has consistently exceeded quarterly estimates – the company has surpassed bottom and top-line estimates in nine of its previous ten quarters.
Kellogg's dividend metrics also deserve a highlight – the company's annual dividend yields a sizable 3.1%, much higher than its Zacks Consumer Staples Sector average of an already steep 2.6%.
Furthermore, the company has upped its dividend payout five times over the last five years.
American Electric Power Company
American Electric Power Co. is a public utility holding company that, through directly and indirectly owned subsidiaries, generates, transmits, and distributes electricity, natural gas, and other commodities.
AEP's beta sits at 0.35.
American Electric Power Company's forward earnings multiple of 20.4X is slightly elevated, representing a 26% premium relative to its Zacks Utilities Sector. Still, the company rocks a Value Style Score of a C.
AEP has repeatedly exceeded bottom-line estimates, registering seven EPS beats over its last ten quarters. Top-line results have also been stellar as of late – AEP has exceeded revenue estimates in six consecutive quarters.
Fortunately for investors seeking an income stream, AEP has that covered with its annual dividend that yields 3.1%, just a tick above its Zacks Sector average.
In addition, the company has upped its dividend payout five times over the last five years, with a five-year annualized dividend growth rate of an impressive 6%.
Bottom Line
Volatility has returned in full force; after a rally off June lows, stocks have tumbled as of late following a hawkish tone from the Fed.
During periods of heightened volatility, looking for stocks with low betas can provide a valuable layer of defense.
Stocks with a beta of less than 1.0 are less volatile than the general market, and those with a beta of higher than 1.0 are more volatile than the general market.
H&R Block, Kellogg Co. and American Electric Power Co. all carry a beta of less than 1.0.
Of course, some gains could be missed by deploying a defense-first approach. However, it's vital to remember that risk management is always king.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: H&R Block, Kellogg and American Electric Power
For Immediate Release
Chicago, IL – August 30, 2022 – Today, Zacks Investment Ideas feature highlights H&R Block (HRB - Free Report) , Kellogg Company (K - Free Report) and American Electric Power Company (AEP - Free Report) .
3 Low-Beta Stocks to Shield Investors from Volatility
Volatility has headlined the market following the Fed's Jackson Hole Economic Symposium. Fed Chairman, Jerome Powell, was rather hawkish in his comments.
Powell believes bringing inflation down will take some time, adding that the plan will, unfortunately, "bring some pain to households and businesses."
Needless to say, the market didn't react well to the comments, as they essentially crushed any hopes that the Fed would soon reverse its rate-hike trajectory.
Pairing these remarks with the fact that we're about to break into September, a historically weak month in the market, gives investors plenty of valid reasons to consider a defense-first approach.
For investors looking to shield themselves against volatility, stocks that carry low betas would provide precisely that.
Stocks with a beta of less than 1.0 are less volatile than the general market, and those with a beta of higher than 1.0 are more volatile than the general market.
Three companies that carry a beta of less than 1.0 include H&R Block, Kellogg Company and American Electric Power Company.
Let's take a closer look at each company.
H&R Block
H&R Block is the world's largest income tax filing company, offering income tax return filing services for salaried individuals via three distinct methods: free online e-filing, assisted tax e-filing, and in-person tax e-filing.
The company carries a beta of 0.69.
In addition, H&R Block's forward earnings multiple resides at a nice 12.2X, representing a steep 42% discount relative to its Zacks Consumer Discretionary Sector. The company carries a Style Score of an A for Value.
HRB has been on an impressive earnings streak, exceeding the Zacks Consensus EPS Estimate in six consecutive quarters. Top-line results have also been robust, with H&R block chaining together ten straight revenue beats.
Furthermore, the company rewards its shareholders via its annual dividend yielding 2.3%, much higher than its Zacks Consumer Discretionary Sector average of 0.9%.
H&R Block has upped its dividend payout four times over the last five years, undoubtedly a major positive.
Kellogg Company
Kellogg Co. manufactures and markets ready-to-eat convenience foods, with a balanced portfolio of cereal and snack products.
Kellogg carries a beta of 0.43.
The company's shares trade at solid valuation multiples, further displayed by its Style Score of a B for Value. K's forward earnings multiple resides at 17.9X, representing a sizable 12% discount relative to its Zacks Consumer Staples Sector.
In addition, Kellogg's has consistently exceeded quarterly estimates – the company has surpassed bottom and top-line estimates in nine of its previous ten quarters.
Kellogg's dividend metrics also deserve a highlight – the company's annual dividend yields a sizable 3.1%, much higher than its Zacks Consumer Staples Sector average of an already steep 2.6%.
Furthermore, the company has upped its dividend payout five times over the last five years.
American Electric Power Company
American Electric Power Co. is a public utility holding company that, through directly and indirectly owned subsidiaries, generates, transmits, and distributes electricity, natural gas, and other commodities.
AEP's beta sits at 0.35.
American Electric Power Company's forward earnings multiple of 20.4X is slightly elevated, representing a 26% premium relative to its Zacks Utilities Sector. Still, the company rocks a Value Style Score of a C.
AEP has repeatedly exceeded bottom-line estimates, registering seven EPS beats over its last ten quarters. Top-line results have also been stellar as of late – AEP has exceeded revenue estimates in six consecutive quarters.
Fortunately for investors seeking an income stream, AEP has that covered with its annual dividend that yields 3.1%, just a tick above its Zacks Sector average.
In addition, the company has upped its dividend payout five times over the last five years, with a five-year annualized dividend growth rate of an impressive 6%.
Bottom Line
Volatility has returned in full force; after a rally off June lows, stocks have tumbled as of late following a hawkish tone from the Fed.
During periods of heightened volatility, looking for stocks with low betas can provide a valuable layer of defense.
Stocks with a beta of less than 1.0 are less volatile than the general market, and those with a beta of higher than 1.0 are more volatile than the general market.
H&R Block, Kellogg Co. and American Electric Power Co. all carry a beta of less than 1.0.
Of course, some gains could be missed by deploying a defense-first approach. However, it's vital to remember that risk management is always king.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.