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Beta is a metric that measures risk and is used to compare the volatility of stocks to the broader market as a whole with the S&P 500 index having a baseline beta value of 1.0. Generally, securities with a beta below 1 have historically been less volatile than the market.
To that note, here are three Zacks Rank #1 (Strong Buy) stocks that currently have a beta under 1.0 and an overall “A” VGM grade for Value, Growth, and Momentum in the Zacks Style Scores system that further supports these stocks being strong investments in the near future.
Albertsons is a familiar name as one of the largest grocery retailers in the United States. The company has made headlines over the last year after Kroger (KR - Free Report) announced its intention to acquire Albertsons for $24.1 billion.
Although the deal has faced regulatory scrutiny, it potentially sees Albertsons being bought out for $34.10 a share and 63% above current levels. Plus, Albertsons’ low beta of 0.55 is reassuring even if the deal doesn’t go through and earnings estimate revisions are slightly up for ACI stock.
Image Source: Zacks Investment Research
Furthermore, trading around $21 a share and just 7.3X forward earnings, Albertsons stock has an “A” Style Scores grade for both Value and Momentum attributing to its overall “A” VGM grade. Albertsons’ P/E valuation sticks out as it is well below the industry average of 15.6X and the S&P 500’s 17.6X.
The next stock has stood out for its strong performance over the last year as the S&P 500 crumbled. Casey’s General Stores stock is up +25% in the last year and has shown the ability to be a defensive hedge against inflation.
Image Source: Zacks Investment Research
Despite the impressive performance, CASY has a 0.82 beta suggesting the stock could still be less volatile than the broader market with earnings projected to grow another 18% in fiscal 2023 after a very impressive FY22 that saw EPS at $9.10 per share.
More impressive, with earrings estimates at $10.77 per share for FY23 this would represent 182% EPS growth for shareholders over the last five years with 2018 EPS at $3.81. The market environment for Retail-Convenience stores continues to be favorable for the expansion of Casey’s General Stores.
Image Source: Zacks Investment Research
Casey’s has continued to expand its convenience stores across the Midwestern United States, now operating in over 16 states with the company’s “A” Style Scores grade for Growth largely attributing to its overall “A” VGM grade.
Rounding out the list is Credicorp which is a part of the top-rated Banks-Foreign Industry, currently in the top 6% of over 250 Zacks industries.
Credicorp is a limited liability company that acts as a holding company to coordinate the policy and administration of its subsidiaries and engages in investing activities primarily implementing universal banking services in Peru.
Image Source: Zacks Investment Research
Along with the uptick in revenue shown in the 15-year chart above, Credicorp’s bottom-line growth is starting to stand out. Credicorp’s stock also has a 0.95 beta, just below the optimum level of less than 1.
This correlates with Credicorp being expected to post strong EPS growth over the next two quarters with annual earnings now forecasted to rise 33% for its current fiscal 2022 and jump another 10% in FY23 at $16.91 per share. Earnings estimate revisions have gone up for FY22 and have started to trend higher for FY23.
Image Source: Zacks Investment Research
On top of that, Credicorp’s valuation sticks out with the stock trading at $142 a share and just 8.4X forward earnings. This is 95% below its decade-long high of 201.2X and a 34% discount to the median of 12.8X. Credicorp’s “A” Style Scores grade for both Value and Growth are the main contributors to its overall “A” VGM grade.
Bottom Line
Investors will be looking for stocks that will be less volatile in 2023 and these three stocks certainly appear to fit the bill with their beta value below 1.0. This in combination with rising earnings estimate revisions is a great sign that there could be more upside for Albertsons, Casey's General Stores, and Credicorp stock as they should be able to sustain growth despite the challenges in the broader economy.
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Buy These 3 Stocks to Combat Volatility in 2023?
Beta is a metric that measures risk and is used to compare the volatility of stocks to the broader market as a whole with the S&P 500 index having a baseline beta value of 1.0. Generally, securities with a beta below 1 have historically been less volatile than the market.
To that note, here are three Zacks Rank #1 (Strong Buy) stocks that currently have a beta under 1.0 and an overall “A” VGM grade for Value, Growth, and Momentum in the Zacks Style Scores system that further supports these stocks being strong investments in the near future.
Albertsons (ACI - Free Report)
Albertsons is a familiar name as one of the largest grocery retailers in the United States. The company has made headlines over the last year after Kroger (KR - Free Report) announced its intention to acquire Albertsons for $24.1 billion.
Although the deal has faced regulatory scrutiny, it potentially sees Albertsons being bought out for $34.10 a share and 63% above current levels. Plus, Albertsons’ low beta of 0.55 is reassuring even if the deal doesn’t go through and earnings estimate revisions are slightly up for ACI stock.
Image Source: Zacks Investment Research
Furthermore, trading around $21 a share and just 7.3X forward earnings, Albertsons stock has an “A” Style Scores grade for both Value and Momentum attributing to its overall “A” VGM grade. Albertsons’ P/E valuation sticks out as it is well below the industry average of 15.6X and the S&P 500’s 17.6X.
Image Source: Zacks Investment Research
Casey’s General Stores (CASY - Free Report)
The next stock has stood out for its strong performance over the last year as the S&P 500 crumbled. Casey’s General Stores stock is up +25% in the last year and has shown the ability to be a defensive hedge against inflation.
Image Source: Zacks Investment Research
Despite the impressive performance, CASY has a 0.82 beta suggesting the stock could still be less volatile than the broader market with earnings projected to grow another 18% in fiscal 2023 after a very impressive FY22 that saw EPS at $9.10 per share.
More impressive, with earrings estimates at $10.77 per share for FY23 this would represent 182% EPS growth for shareholders over the last five years with 2018 EPS at $3.81. The market environment for Retail-Convenience stores continues to be favorable for the expansion of Casey’s General Stores.
Image Source: Zacks Investment Research
Casey’s has continued to expand its convenience stores across the Midwestern United States, now operating in over 16 states with the company’s “A” Style Scores grade for Growth largely attributing to its overall “A” VGM grade.
Credicorp (BAP - Free Report)
Rounding out the list is Credicorp which is a part of the top-rated Banks-Foreign Industry, currently in the top 6% of over 250 Zacks industries.
Credicorp is a limited liability company that acts as a holding company to coordinate the policy and administration of its subsidiaries and engages in investing activities primarily implementing universal banking services in Peru.
Image Source: Zacks Investment Research
Along with the uptick in revenue shown in the 15-year chart above, Credicorp’s bottom-line growth is starting to stand out. Credicorp’s stock also has a 0.95 beta, just below the optimum level of less than 1.
This correlates with Credicorp being expected to post strong EPS growth over the next two quarters with annual earnings now forecasted to rise 33% for its current fiscal 2022 and jump another 10% in FY23 at $16.91 per share. Earnings estimate revisions have gone up for FY22 and have started to trend higher for FY23.
Image Source: Zacks Investment Research
On top of that, Credicorp’s valuation sticks out with the stock trading at $142 a share and just 8.4X forward earnings. This is 95% below its decade-long high of 201.2X and a 34% discount to the median of 12.8X. Credicorp’s “A” Style Scores grade for both Value and Growth are the main contributors to its overall “A” VGM grade.
Bottom Line
Investors will be looking for stocks that will be less volatile in 2023 and these three stocks certainly appear to fit the bill with their beta value below 1.0. This in combination with rising earnings estimate revisions is a great sign that there could be more upside for Albertsons, Casey's General Stores, and Credicorp stock as they should be able to sustain growth despite the challenges in the broader economy.