Back to top

Stocks in the News

Zacks Premium Research

Avoid Volatility with These 2 low Beta Large-Cap Stocks


Trades from $3

Finding companies with the criteria you want isn’t always easy.  You could spend hours searching ticker after ticker, only to find companies which aren’t worthy of your hard earned cash.  An easier way to navigate through this is by using high quality stock screeners.  Screening helps investors narrow down companies to invest in based on their ability to meet every criteria selected.  Any company who misses even one of the criteria requirements will be filtered out.

This lets one easily choose ideal metrics.  Screens are effective because they sift out bad stocks and only keep the cream of the crop in.  It isn’t always easy to create an effective screen.  Our Zacks Premium Screens have helped with this, bringing profits to many investors over time.  Our predefined criteria are chosen carefully to capture special kinds of companies.

Today, we’ve dug up two stocks using one of our premium screens known as “Top Ranked Large-Caps”.  Some of the metrics of this screen requires a stock to have an average daily trading volume of at least 500,000 shares over the last 20 days, a market cap over $10 billion, and a Zacks Rank #2 (Buy) or better.  We added an additional criterion which allowed us to find low beta stocks.  Without any further ado, let’s take a look at what our modified premium screen has found for us today.

Tyson Foods Inc-(TSN - Analyst Report)

Tyson Foods is the world’s largest fully-integrated producer, processor and marketer of chicken and poultry-based food products.  It’s worth noting that Tyson is also the second largest maker of corn and flour tortillas in the US, through its Mexican Original brand.  TSN stock is a Zacks Rank #1 (Strong Buy) and it has a beta of just 0.26.

Tyson’s stock is 17% higher than it was three months ago, but it still looks like a fairly priced stock.  This can be seen through its forward PE and PEG of 16.81 and 1.53 respectively.  TSN also has a price-to-sales of 0.75.  When a company’s price-to-sales is under one, there may be value present.  This year, while sales are expected to slow down, EPS is actually forecasted to rise by 43.3%.  With a current ratio and debt-to-capital of 1.8 and 0.38 respectively, it is clear to see that the company is pretty liquid and that it also has a decent capital structure.  Tyson has beaten our EPS consensus in three of the last four quarters.  Its next earnings report is expected to be released in late November, and its Strong Buy rank shows that it has a strong chance of beating EPS expectations.

Ulta Salon, Cosmetics & Fragrance Inc-(ULTA - Snapshot Report)

Ulta is a massive beauty retailer that provides a one-stop shop for prestige, mass, and salon products and services in the US.  The company offers a unique combination of over 21,000 prestige and mass beauty products across cosmetics, fragrance, haircare, skincare, bath and body products, as well as salon haircare products.  ULTA is a Zacks Rank #2 (Buy) and it has a beta of just 0.59.

Ulta’s valuation is not the cheapest when looking at fundamental metrics, but the premium price tag on the stock is warranted.  The company has advantages over its fellow peers, and also enjoys much larger profit margins than the rest of its industry peers.  Indeed, ULTA has a trailing twelve month net margin of 8.35%, while the industry’s average net margin stands at only 4.32%.  Sales growth also exceeds the industry norm, with revenues expected to pick up by approximately 20.6% this year.  EPS is forecasted to grow by 25% this year, but Ulta could surpass this mark since it has a history of consistently topping our EPS consensus estimate.  Ulta is expected to deliver its next quarterly earnings report in early December.    

Bottom Line

One magical screening ingredient which can’t be overlooked is a Zacks Rank #2 (Buy) or better.  The rank helps to find companies which look like dependable earnings candidates.  In addition to this great metric, the Zacks Premium Screenshelp you to add other criteria to find the most superior investment choices.  While this article outlined potential candidates from one screen, the Zacks Premium service gives you access to the “Top Ranked Large-Caps” and 45 other premium screens designed to give you superior investment returns.

To use Zacks Premium Screens to find more stock picks based on criteria that’s most important to you— plus, gain access to the Zacks Rank for your stocks, mutual funds and ETFs; Zacks Style Scores, Equity Research Reports; Focus List portfolio of 50-longer-term stocks and more—start your 30-day free trial to Zacks Premium.