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Concerns have been growing over the health of the nation’s economy amid rising inflationary pressures and the ongoing conflict in the Middle East. However, consumer confidence unexpectedly rebounded in April as optimism surrounding a peace deal between the United States and Iran rose after President Donald Trump announced a two-week ceasefire.
Even then, the bigger concerns are far from over. Inflation remains stubbornly high, and a peace deal is far from reality, with both countries having called off talks. We, thus, recommend buying four defensive stocks from the utility sector, namely, American States Water Company (AWR - Free Report) , CMS Energy Corporation (CMS - Free Report) , Atmos Energy Corporation (ATO - Free Report) and Northwest Natural Holding Company (NWN - Free Report) .
These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
Consumer Confidence Rebounds But Concerns Remain
The Conference Board said on Tuesday that consumer confidence unexpectedly rose 0.6% in April to 92.8, surpassing the consensus estimate of a reading of 89. The sudden jump in consumer confidence comes just days after Trump announced a two-week ceasefire to the war with Iran that would also see the reopening of the Strait of Hormuz, a key passage for more than 40% of the global oil shipments.
Stocks have rallied since the announcement, but the ceasefire appears to be fragile, as the first round of peace talks fell apart and both nations backed off from the next round of negotiations.
Needless to say, the crisis is far from over. The consumer confidence report comes days after the University of Michigan’s consumer sentiment report, which is in stark contrast. The Consumer Sentiment Index fell to a final reading of 49.8 in April, plunging to an all-time low, on rising inflation and uncertainty over the end of the U.S.-Iran conflict.
Global oil prices have jumped by over 30% since the Middle East conflict began. Shipping disruptions through the Strait of Hormuz have also driven up the cost of several essential commodities, including fertilizers, petrochemicals, semiconductors and aluminum.
Inflation has remained an ongoing concern for both consumers and the Federal Reserve. According to the Commerce Department’s latest report, the consumer price index (CPI) rose 0.9% in March following a 2.4% increase in February, pushing the annual inflation rate to 3.3% — its highest level since May 2024.
4 Low-Beta Utility Stocks With Growth Potential
American States Water Company
American States Water Company, along with its subsidiaries, provides fresh water, wastewater services and electricity to its customers in the United States. AWR principally works through its two major subsidiaries — Golden State Water Company and American States Utility Services.
American States Water Company has an expected earnings growth rate of 10.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the last 60 days. AWR has a beta of 0.66 and a current dividend yield of 2.54%.
CMS Energy Corporation
CMS Energy Corporation is an energy company. It is the parent holding company of Consumers, an electric and gas utility, and NorthStar Clean Energy, a primarily domestic independent power producer and marketer.
CMS Energy Corporation has an expected earnings growth rate of 7.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CMS currently carries a Zacks Rank #2. CMS Energy Corporation has a beta of 0.43 and a current dividend yield of 3%.
Atmos Energy Corporation
Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy operates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 11.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the last 60 days. ATO currently has a Zacks Rank of 2, a beta of 0.69 and a current dividend yield of 2.15%.
Northwest Natural Holding Company
Northwest Natural Holding Company builds and maintains natural gas distribution systems, as well as invests in natural gas pipeline projects through its subsidiaries. NWN serves residential, commercial and industrial customers primarily in the United States, Canada and the Service Territory.
Northwest Natural Holding Company has an expected earnings growth rate of 4.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 60 days. Zacks Rank 2 NWN has a beta of 0.50 and a current dividend yield of 3.68%.
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Consumer Confidence Rebounds Amid Geopolitical Tensions: 4 Safe Bets
Key Takeaways
Concerns have been growing over the health of the nation’s economy amid rising inflationary pressures and the ongoing conflict in the Middle East. However, consumer confidence unexpectedly rebounded in April as optimism surrounding a peace deal between the United States and Iran rose after President Donald Trump announced a two-week ceasefire.
Even then, the bigger concerns are far from over. Inflation remains stubbornly high, and a peace deal is far from reality, with both countries having called off talks. We, thus, recommend buying four defensive stocks from the utility sector, namely, American States Water Company (AWR - Free Report) , CMS Energy Corporation (CMS - Free Report) , Atmos Energy Corporation (ATO - Free Report) and Northwest Natural Holding Company (NWN - Free Report) .
These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.
Consumer Confidence Rebounds But Concerns Remain
The Conference Board said on Tuesday that consumer confidence unexpectedly rose 0.6% in April to 92.8, surpassing the consensus estimate of a reading of 89. The sudden jump in consumer confidence comes just days after Trump announced a two-week ceasefire to the war with Iran that would also see the reopening of the Strait of Hormuz, a key passage for more than 40% of the global oil shipments.
Stocks have rallied since the announcement, but the ceasefire appears to be fragile, as the first round of peace talks fell apart and both nations backed off from the next round of negotiations.
Needless to say, the crisis is far from over. The consumer confidence report comes days after the University of Michigan’s consumer sentiment report, which is in stark contrast. The Consumer Sentiment Index fell to a final reading of 49.8 in April, plunging to an all-time low, on rising inflation and uncertainty over the end of the U.S.-Iran conflict.
Global oil prices have jumped by over 30% since the Middle East conflict began. Shipping disruptions through the Strait of Hormuz have also driven up the cost of several essential commodities, including fertilizers, petrochemicals, semiconductors and aluminum.
Inflation has remained an ongoing concern for both consumers and the Federal Reserve. According to the Commerce Department’s latest report, the consumer price index (CPI) rose 0.9% in March following a 2.4% increase in February, pushing the annual inflation rate to 3.3% — its highest level since May 2024.
4 Low-Beta Utility Stocks With Growth Potential
American States Water Company
American States Water Company, along with its subsidiaries, provides fresh water, wastewater services and electricity to its customers in the United States. AWR principally works through its two major subsidiaries — Golden State Water Company and American States Utility Services.
American States Water Company has an expected earnings growth rate of 10.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.6% over the last 60 days. AWR has a beta of 0.66 and a current dividend yield of 2.54%.
CMS Energy Corporation
CMS Energy Corporation is an energy company. It is the parent holding company of Consumers, an electric and gas utility, and NorthStar Clean Energy, a primarily domestic independent power producer and marketer.
CMS Energy Corporation has an expected earnings growth rate of 7.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CMS currently carries a Zacks Rank #2. CMS Energy Corporation has a beta of 0.43 and a current dividend yield of 3%.
Atmos Energy Corporation
Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy operates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 11.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the last 60 days. ATO currently has a Zacks Rank of 2, a beta of 0.69 and a current dividend yield of 2.15%.
Northwest Natural Holding Company
Northwest Natural Holding Company builds and maintains natural gas distribution systems, as well as invests in natural gas pipeline projects through its subsidiaries. NWN serves residential, commercial and industrial customers primarily in the United States, Canada and the Service Territory.
Northwest Natural Holding Company has an expected earnings growth rate of 4.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 60 days. Zacks Rank 2 NWN has a beta of 0.50 and a current dividend yield of 3.68%.