Yahoo Finance 5 Top Ultra-Safe Stocks to Buy as Economic Downturn Looms
Elevated prices of essential commodities, considerably higher interest rates, and at present tightening credit situations no doubt are likely to weigh on business investment and consumer outlays in the United States. First-quarter GDP growth is widely expected to be moderate, while the index of future economic activity recently posted a record drop, indicating a forthcoming economic slump.
The Leading Economic Index (LEI) of the Conference Board dropped to 108.4 in March from the revised reading of 109.7 in February and has registered the 12th monthly drop in a row. It’s also the lowest reading since November 2020, when the economy grappled with the outbreak of the coronavirus.
From September 2022 to March 2023, the LEI fell by 4.5%, thereby signaling a recession for quite a long time. Justyna Zabinska-La Monica, Senior Manager, at the Conference Board, in reality, expects the U.S. economy to be in recession by mid-2023 (read more: 5 Top Stocks to Buy as Recession Fright Intensifies).
Investment activities in businesses, meanwhile, are softening, thanks to stubbornly high inflation. Orders for durable goods have decreased in recent times, while spending took a beating due to the higher cost of capital. China’s reopening and solid first-quarter GDP growth are yet to uplift business sentiment in the United States.
Being an interest-rate-sensitive sector, housing is also struggling at the moment. Home sales lessened over the past year, while construction activities decreased, indicating substantial pressure on the housing sector in the upcoming months. Let us also not forget that housing affordability remains at an all-time low.
Amid all these, the banking crisis in the United States has increased worries about economic growth. The recent collapse of some of the regional banks has impacted credit growth, and in all likelihood, is expected to derail real GDP growth. What’s more, First Republic Banks’ recent declaration that its deposits decreased significantly in the first quarter reignited fears about the current health of the entire banking system.
The United States, by the way, is already witnessing a freight recession, signaling a broader slowdown in economic growth. Fewer trucks are now delivering goods, leading to a significant decline in diesel prices.
Given that the United States is worryingly close to an economic downturn, the stock market is now undoubtedly subjected to bouts of volatility. Hence, astute investors should place their bets on ultra-safe stocks that can counter such upheavals in the market and provide a steady stream of income.
To select such stocks, we have chosen those that have a low beta (ranges from 0 to 1), making them unperturbed to market vagaries. These stocks also provide dividends, meaning they have a solid business model that helps them counter market volatility. They have a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Runway Growth Finance Corp. RWAY is an externally managed business development company. The company has a beta of 0.75 and a Zacks Rank #1.
RWAY has a dividend yield of 14.4%. The Zacks Consensus Estimate for its current-year earnings has moved up 14% over the past 60 days. The company’s expected earnings growth rate for the current year is 28.1%.
Cisco Systems CSCO is an IP-based networking company offering products and services to service providers, companies, commercial users and individuals. The company has a beta of 1 and a Zacks Rank #2.
CSCO has a dividend yield of 3.3%. The Zacks Consensus Estimate for its current-year earnings has moved up 0.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 11.9%.
KimberlyClark KMB is principally engaged in manufacturing and marketing a wide range of consumer products worldwide. The company has a beta of 0.41 and a Zacks Rank #2.
KMB has a dividend yield of 3.3%. The Zacks Consensus Estimate for its current-year earnings has moved up 0.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 5.5%.
NiSource NI is an energy holding company and together with its subsidiaries provides natural gas, electricity, and other products and services in the United States. The company has a beta of 0.47 and a Zacks Rank #2.
NI has a dividend yield of 3.5%. The Zacks Consensus Estimate for its current-year earnings has moved up 1.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 6.8%.
Omnicom Group OMC is one of the largest advertising, marketing and corporate communications companies in the world. The company has a beta of 0.83 and a Zacks Rank #2.
OMC has a dividend yield of 3%. The Zacks Consensus Estimate for its current-year earnings has moved up 2.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 6.1%.
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NiSource, Inc (NI) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Omnicom Group Inc. (OMC) : Free Stock Analysis Report
Kimberly-Clark Corporation (KMB) : Free Stock Analysis Report
Runway Growth Finance Corp. (RWAY) : Free Stock Analysis Report
