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5 Safe Stocks to Buy as Consumer Sentiment Takes a Hit
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Americans are concerned about the economy's future as a jump in inflation this year is denting their confidence. Consumer sentiment has ebbed from its highs at the beginning of this year.
The University of Michigan’s preliminary reading on the overall index of consumer sentiment came up with a reading of 77.9 in April compared with the final reading of 79.4 in the prior month.
Moreover, the consumer’s expectation index of inflation over the next one-year period also rose to 3.1% in April from 2.9% in March. The outlook for inflation over the next five years rose to 3% in April from 2.8% in March.
Inflation has been ticking up over the past three months after a sharp decline in 2023. The Consumer Price Index (CPI) rose 0.4% month over month in March, higher than economists’ expectations of a rise of 0.3%. On a year-over-year basis, CPI jumped 3.5% in March.
Inflation has declined sharply from its peak of 9.1% in June 2022 but remains a lot higher than the Federal Reserve’s 2% target. The minutes of the Federal Reserve’s March FOMC meeting show that central bank officials remain concerned that inflation isn’t declining at a fast pace.
Although the Federal Reserve is still hopeful about interest rate cuts this year, it still isn’t sure about the time. Higher interest rates can keep markets volatile for a longer period.
Our Choices
Given this situation, it would thus be wise to invest in defensive stocks like utilities and consumer staples. Also, these stocks belong to the category of low-beta stocks (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Atmos Energy Corporation (ATO - Free Report) , along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.4 million customers in more than 1,400 communities in eight states, from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energyoperates more than 72,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. ATO presently has a Zacks Rank #2. Atmos Energy has a beta of 0.66 and a current dividend yield of 2.82%.
Global Water Resources, Inc. (GWRS - Free Report) is a water resource management company. GWRS owns and operates regulated water, wastewater and recycled water utilities.
Global Water Resources has an expected earnings growth rate of 19.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. GWRS presently carries a Zacks Rank #2. Global Water Resources has a beta of 0.97 and a current dividend yield of 2.47%.
American Water Works Company, Inc. (AWK - Free Report) provides essential water services to over 14 million customers in 24 states and has an employee strength of 6,500. AWK also acquires small water service providers to expand its customer base.
American Water Works Company has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 60 days. AWK presently carries a Zacks Rank #2. American Water Works has a beta of 0.63 and a current dividend yield of 2.43%.
Lancaster Colony Corporation (LANC - Free Report) is a manufacturer and marketer of specialty food products for the retail and foodservice markets. LANC’s wholly-owned subsidiaries, including T. Marzetti Company, produce and market high-quality national and regionally-branded food products throughout the United States for the retail and foodservice markets.
Lancaster Colony Corporation has an expected earnings growth rate of 34% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last 60 days. LANC presently has a Zacks Rank #2. Lancaster Colonyhas a beta of 0.35 and a current dividend yield of 1.84%.
Molson Coors Beverage Company (TAP - Free Report) , the global manufacturer and seller of beer and other beverage products, has a diverse portfolio of owned and partner brands. TAP’s brands include global priority brands such as Blue Moon, Miller Lite, CoorsBanquet, Coors Light, Miller Genuine Draft and Staropramen, as well as regional brands like Carling and Molson Canadian.
Molson Coors Beverage Company’s expected earnings growth rate for the current year is 4.2%. The Zacks Consensus Estimate for the current-year earnings has improved 3.1% over the past 60 days. TAP presently carries a Zacks Rank #2. Molson Coors Beverage Company has a beta of 0.35 and a current dividend yield of 2.65%.
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5 Safe Stocks to Buy as Consumer Sentiment Takes a Hit
Americans are concerned about the economy's future as a jump in inflation this year is denting their confidence. Consumer sentiment has ebbed from its highs at the beginning of this year.
The University of Michigan’s preliminary reading on the overall index of consumer sentiment came up with a reading of 77.9 in April compared with the final reading of 79.4 in the prior month.
Moreover, the consumer’s expectation index of inflation over the next one-year period also rose to 3.1% in April from 2.9% in March. The outlook for inflation over the next five years rose to 3% in April from 2.8% in March.
Inflation has been ticking up over the past three months after a sharp decline in 2023. The Consumer Price Index (CPI) rose 0.4% month over month in March, higher than economists’ expectations of a rise of 0.3%. On a year-over-year basis, CPI jumped 3.5% in March.
Inflation has declined sharply from its peak of 9.1% in June 2022 but remains a lot higher than the Federal Reserve’s 2% target. The minutes of the Federal Reserve’s March FOMC meeting show that central bank officials remain concerned that inflation isn’t declining at a fast pace.
Although the Federal Reserve is still hopeful about interest rate cuts this year, it still isn’t sure about the time. Higher interest rates can keep markets volatile for a longer period.
Our Choices
Given this situation, it would thus be wise to invest in defensive stocks like utilities and consumer staples. Also, these stocks belong to the category of low-beta stocks (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank. Each of the stocks has a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Atmos Energy Corporation (ATO - Free Report) , along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.4 million customers in more than 1,400 communities in eight states, from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energyoperates more than 72,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. ATO presently has a Zacks Rank #2. Atmos Energy has a beta of 0.66 and a current dividend yield of 2.82%.
Global Water Resources, Inc. (GWRS - Free Report) is a water resource management company. GWRS owns and operates regulated water, wastewater and recycled water utilities.
Global Water Resources has an expected earnings growth rate of 19.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. GWRS presently carries a Zacks Rank #2. Global Water Resources has a beta of 0.97 and a current dividend yield of 2.47%.
American Water Works Company, Inc. (AWK - Free Report) provides essential water services to over 14 million customers in 24 states and has an employee strength of 6,500. AWK also acquires small water service providers to expand its customer base.
American Water Works Company has an expected earnings growth rate of 6.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 60 days. AWK presently carries a Zacks Rank #2. American Water Works has a beta of 0.63 and a current dividend yield of 2.43%.
Lancaster Colony Corporation (LANC - Free Report) is a manufacturer and marketer of specialty food products for the retail and foodservice markets. LANC’s wholly-owned subsidiaries, including T. Marzetti Company, produce and market high-quality national and regionally-branded food products throughout the United States for the retail and foodservice markets.
Lancaster Colony Corporation has an expected earnings growth rate of 34% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the last 60 days. LANC presently has a Zacks Rank #2. Lancaster Colonyhas a beta of 0.35 and a current dividend yield of 1.84%.
Molson Coors Beverage Company (TAP - Free Report) , the global manufacturer and seller of beer and other beverage products, has a diverse portfolio of owned and partner brands. TAP’s brands include global priority brands such as Blue Moon, Miller Lite, CoorsBanquet, Coors Light, Miller Genuine Draft and Staropramen, as well as regional brands like Carling and Molson Canadian.
Molson Coors Beverage Company’s expected earnings growth rate for the current year is 4.2%. The Zacks Consensus Estimate for the current-year earnings has improved 3.1% over the past 60 days. TAP presently carries a Zacks Rank #2. Molson Coors Beverage Company has a beta of 0.35 and a current dividend yield of 2.65%.