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3 Low-Beta Stocks Suited Nicely for Risk-Averse Investors
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Low-beta stocks would be great considerations for investors looking to shield themselves against volatility, as they have historically shown to be less affected by broader market fluctuations.
To give a quick refresher, beta measures a stock's volatility or systematic risk compared to the overall market.
Stocks with a beta of less than 1.0 provide more stability during volatile periods, and the inverse is also true – stocks with a beta of higher than 1.0 are more susceptible to the broader market’s movements.
For those seeking a more conservative approach, three low-beta stocks – Walmart (WMT - Free Report) , McDonald’s (MCD - Free Report) , and Procter & Gamble (PG - Free Report) – could all be considered.
All three sport a favorable Zacks Rank, have an established track record of stable growth, and consistently shell out dividends, undoubtedly a strong trio. Let’s take a closer look at each.
Walmart
Walmart offers a diverse blend of products at reasonable prices, allowing it to capture revenue from lower and higher-end consumers who decide to ‘trade down’ and save their cash. The stock is currently a Zacks Rank #2 (Buy).
The retail titan posted strong results in its latest release, delivering year-over-year global eCommerce growth of 26% and raising its FY24 outlook. Quarterly revenue totaled $152.2 billion, ahead of expectations and improving 7% from the year-ago period.
Image Source: Zacks Investment Research
In addition, Walmart’s 21.3% trailing twelve-month ROE is certainly worth highlighting, reflecting a higher level of efficiency in generating profits from existing assets. As shown below, the current value is well above the Zacks Retail and Wholesale sector average.
Image Source: Zacks Investment Research
And to top it off, Walmart is a member of the elite Dividend Aristocrat group, putting its shareholder-friendly nature on full display. Shares currently yield 1.5% annually, with the payout growing 2% over the last five years.
Image Source: Zacks Investment Research
McDonald’s
We’re all familiar with the restaurant titan McDonald’s, seeing those golden arches at seemingly every stop. The stock is presently a Zacks Rank #2 (Buy), with earnings expectations increasing across the board.
Image Source: Zacks Investment Research
Shares may not entice value-focused investors, further reflected by the Style Score of “D” for Value. MCD shares currently trade at a 26.6X forward earnings multiple, modestly above the five-year median and Zacks sector average.
Image Source: Zacks Investment Research
Still, investors haven’t minded forking up the premium for shares given the company’s favorable growth trajectory, with earnings forecasted to climb 10% on 8% higher revenues in its current fiscal year (FY23). And in FY24, estimates call for an additional 9% uptick in earnings and 7% sales growth.
Procter & Gamble
Procter & Gamble, a current Zacks Rank #2 (Buy), posted better-than-expected results and provided optimistic guidance in its latest release, helping shares close 3.5% higher post-earnings. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.
Image Source: Zacks Investment Research
Procter & Gamble is a classic dividend stock, holding the ranks of not only a Dividend Aristocrat but a Dividend King as well. PG shares currently yield 2.5% annually, with the company carrying a solid 6.3% five-year annualized growth rate.
Image Source: Zacks Investment Research
In addition, it’s worth noting that shares have recently found support near the $142 per share level, a previous resistance level for the stock. This ‘resistance-support flip’ is illustrated in the chart below.
Image Source: Zacks Investment Research
Bottom Line
For those seeking a more conservative approach, low-beta stocks provide precisely that. These stocks are less susceptible to the broader market’s movements, helping to limit those spooky price swings.
And all three above – Walmart (WMT - Free Report) , McDonald’s (MCD - Free Report) , and Procter & Gamble (PG - Free Report) – could be great considerations for those looking for stability.
All three sport a favorable Zacks Rank and have an established track record of success, undeniably significant benefits.
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3 Low-Beta Stocks Suited Nicely for Risk-Averse Investors
Low-beta stocks would be great considerations for investors looking to shield themselves against volatility, as they have historically shown to be less affected by broader market fluctuations.
To give a quick refresher, beta measures a stock's volatility or systematic risk compared to the overall market.
Stocks with a beta of less than 1.0 provide more stability during volatile periods, and the inverse is also true – stocks with a beta of higher than 1.0 are more susceptible to the broader market’s movements.
For those seeking a more conservative approach, three low-beta stocks – Walmart (WMT - Free Report) , McDonald’s (MCD - Free Report) , and Procter & Gamble (PG - Free Report) – could all be considered.
All three sport a favorable Zacks Rank, have an established track record of stable growth, and consistently shell out dividends, undoubtedly a strong trio. Let’s take a closer look at each.
Walmart
Walmart offers a diverse blend of products at reasonable prices, allowing it to capture revenue from lower and higher-end consumers who decide to ‘trade down’ and save their cash. The stock is currently a Zacks Rank #2 (Buy).
The retail titan posted strong results in its latest release, delivering year-over-year global eCommerce growth of 26% and raising its FY24 outlook. Quarterly revenue totaled $152.2 billion, ahead of expectations and improving 7% from the year-ago period.
Image Source: Zacks Investment Research
In addition, Walmart’s 21.3% trailing twelve-month ROE is certainly worth highlighting, reflecting a higher level of efficiency in generating profits from existing assets. As shown below, the current value is well above the Zacks Retail and Wholesale sector average.
Image Source: Zacks Investment Research
And to top it off, Walmart is a member of the elite Dividend Aristocrat group, putting its shareholder-friendly nature on full display. Shares currently yield 1.5% annually, with the payout growing 2% over the last five years.
Image Source: Zacks Investment Research
McDonald’s
We’re all familiar with the restaurant titan McDonald’s, seeing those golden arches at seemingly every stop. The stock is presently a Zacks Rank #2 (Buy), with earnings expectations increasing across the board.
Image Source: Zacks Investment Research
Shares may not entice value-focused investors, further reflected by the Style Score of “D” for Value. MCD shares currently trade at a 26.6X forward earnings multiple, modestly above the five-year median and Zacks sector average.
Image Source: Zacks Investment Research
Still, investors haven’t minded forking up the premium for shares given the company’s favorable growth trajectory, with earnings forecasted to climb 10% on 8% higher revenues in its current fiscal year (FY23). And in FY24, estimates call for an additional 9% uptick in earnings and 7% sales growth.
Procter & Gamble
Procter & Gamble, a current Zacks Rank #2 (Buy), posted better-than-expected results and provided optimistic guidance in its latest release, helping shares close 3.5% higher post-earnings. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.
Image Source: Zacks Investment Research
Procter & Gamble is a classic dividend stock, holding the ranks of not only a Dividend Aristocrat but a Dividend King as well. PG shares currently yield 2.5% annually, with the company carrying a solid 6.3% five-year annualized growth rate.
Image Source: Zacks Investment Research
In addition, it’s worth noting that shares have recently found support near the $142 per share level, a previous resistance level for the stock. This ‘resistance-support flip’ is illustrated in the chart below.
Image Source: Zacks Investment Research
Bottom Line
For those seeking a more conservative approach, low-beta stocks provide precisely that. These stocks are less susceptible to the broader market’s movements, helping to limit those spooky price swings.
And all three above – Walmart (WMT - Free Report) , McDonald’s (MCD - Free Report) , and Procter & Gamble (PG - Free Report) – could be great considerations for those looking for stability.
All three sport a favorable Zacks Rank and have an established track record of success, undeniably significant benefits.