“The equity market is in turmoil as investors continue to reflect on the new reality – tightening financial conditions.
In a recent note sent to clients, Goldman Sachs strategist Ben Snider advised investors to buy stable stocks, believing they are likely to outshine the broader market.
“Stable stocks offer investors a shelter as these are associated with fewer earnings growth volatility. The current conditions like slower economic growth should push investors towards buying solid stocks which provide low earnings growth volatility,” Snider added.
Stable stocks normally trade with a valuation premium to the market, however, nowadays that premium is significantly smaller due to looming recession and Fed’s tighter monetary policy.
The growing interest in growth stocks could affect the appeal of stable stocks, but growth stocks are susceptible to central bank tightening while trading with elevated valuations.
Here are the top stable stocks to buy now, as listed by Goldman Sachs.
The Home Depot (NYSE: HD) is the largest home improvement retail company in the U.S. providing building materials, appliances, services, and products for home improvement, lawn, garden and decor.
The company operates roughly 2,317 stores across the United States, and territories of the U.S. Virgin Islands and Guam, the Commonwealth of Puerto Rico, Canada and Mexico.
The company has stores in all 10 provinces in Canada, and all 32 states of Mexico.
The Home Depot also owns Interline Brands, now known as The Home Depot Pro, with 70 distribution centers throughout the U.S.
The company serves two main customer groups including professional customers and do-it-yourself (DIY) customers. The former include professional renovators, handymen, property managers, general contractors, electricians, and more. DIY customers are those who buy the necessary products and complete installations by themselves.
Even though contractors represent only 5% of Home Depot’s customers, they account for as much as 45% of the company’s 132 billion in annual sales. To meet this demand, the retailer is building new distribution centers with a unique design to fulfill the needs of builders that roll up in a contractor flatbed truck.
The Home Depot carries several well-known brands such as carpet cleaning services provider Chem-Dry, Behr Paints, Homelite, Martha Stewart Living Omnimedia, American Woodmark, as well as multiple in-house brands including Husky, HDX, Workforce, Home Decorators Collection, and Hampton Bay, among others.
Home Depot is due to report its earnings in May. Shares are down roughly 26% YTD.
Johnson & Johnson (NYSE: JNJ) is a multinational holding company that develops, manufactures, and sells a wide range of healthcare products such as medical devices, pharmaceuticals, and consumer goods.
The company operates through three primary segments including Consumer Health, Pharmaceutical, and Medical Devices.
The first segment is focused on developing and marketing products focused on personal healthcare such as beauty products, baby care, oral care, women’s health products, over-the-counter medicines, and more.
The Pharmaceutical unit focuses on six therapeutic areas such as neuroscience, immunology, oncology, infectious diseases, cardiovascular and metabolism, and pulmonary hypertension. The Medical Devices business offers a broad array of products used for surgeries, interventional solutions, and orthopedics.
Johnson & Johnson is one of the most valuable companies in the world, and one of the just two U.S. companies that have a prime credit rating of AAA. The company is tracked by the benchmark index Dow Jones Industrial Average and was ranked no. 36 on the 2021 Fortune 500 list of the largest U.S. companies by total revenue.
The company has roughly 250 subsidiary businesses and operates in 60 countries across the world, with its products being sold in more than 175 countries.
Some of its best-known consumer products include Tylenol drugs, Band-Aid adhesive bandages, Johnson’s Baby products, Neutrogena beauty products, Acuvue contact lenses, and others.
Last November, the corporation announced its plan to split into two publicly-traded companies, one of which will focus on developing and selling consumer products, while the latter will be focused on pharmaceuticals.
Johnson & Johnson shares are up 7% YTD. The company is due to report again in July.
PepsiCo (NYSE: PEP) engages in the manufacturing, distribution, and marketing of snacks and beverages. As of January of last year, the company has 23 brands that generated more than $1 Billion in sales and has operations across the globe, with its products being distributed in over 200 countries.
PepsiCo generates annual net revenues of more than $70 billion and based on profit, market cap, and net revenue, it is the second-largest food and beverage company in the world, after Nestle.
The company’s products include multiple globally-known food and beverage brands such as Pepsi, Gatorade, Frito-Lay, Muscle Milk, Quaker Oats, and many more. PepsiCo was founded in 1965 when Pepsi-Cola Company and Frito-Lay announced a merger deal.
PepsiCo has seven business segments including PepsiCo Beverages North America; Frito-Lay North America; Quaker Foods North America; Europe; Africa, Middle East, and South Asia; Latin America; and the Asia Pacific, Australia, New Zealand, and China.
The first segment, PepsiCo Beverages North America, represents the company’s highest revenue earner and includes all beverage brands across the United States and Canada. The segment is composed of iconic beverages such as Pepsi, Gatorade, and Mountain Dew and also includes partnership brands like Lipton.
In 2020, PepsiCo acquired Pioneer Foods for $1.7 billion. Before that, the snacks-and-beverage giant bought Quaker Oats Company in 2001 and Tropicana Products in 1998.
PepsiCo recently reported results that showed continued business strength despite headwinds from Russia and Ukraine.
PepsiCo stock price is trading in the green territory YTD.
Alphabet (NASDAQ:GOOGL) is a technology conglomerate, best known as the owner of Google. The holding company was created following the restructuring of Google in 2015, making Alphabet the parent company of Google and its subsidiaries.
Today, Alphabet is the world’s third-largest technology company by revenue and fourth-largest by market cap. It is also one of the Big Five American tech giants including along with Apple, Amazon, Meta, and Microsoft. Alphabet operates through three segments – Google Services, Google Cloud, and Other Bets.
The first segment constitutes ads, the Android operating system, Google Maps, Youtube, Search, Chrome, and hardware products such as Pixel phones, Chromecast with Google TV, and Google Nest Hub.
Google Cloud is focused on developing infrastructure and data analytics platforms, collaboration solutions, and other services built for enterprise clients such as Google Workspace and Google Cloud Platform, which allows developers to create, test, and launch apps using its infrastructure.
The Google Workspace offering includes popular applications like Gmail, Drive, Docs, Meet and Calendar.
Other Bets segment is focused on internet sales and television services, alongside licensing and R&D services.
Alphabet was founded by Larry Page and Sergey Brin in 1998 while both were Ph.D. students at Stanford University in California. Page and Brin resigned from their executive roles in 2019, succeeded by CEO Sundar Pichai, also CEO of Google. Apart from being co-founders, Brin and Page are also board members and controlling shareholders of Alphabet.
Alphabet shares are down over 20% YTD. The company reported results in April with sales rising 23% YoY.
Visa (NYSE:V) is a financial services company that develops payment technology solutions and services that provides in more than 200 countries and regions around the world. Based in Foster City, California – Visa connects enterprises, consumers, merchants, financial organizations, and governments to electronic payments.
It is one of the most valuable companies in the world, handling billions of dollars of funds transfers across the globe via its Visa credit, debit, and prepaid cards.
Instead of issuing cards and setting rates and fees by itself, Visa provides financial institutions with its payment solutions which they then use to offer payment cards and cash access programs to their clients.
Visa processes nearly all of the transactions through its electronic payments network VisaNet at 4 of its data centers in Ashburn, Highlands Ranch, London, and Singapore. These data centers are strongly protected from natural disasters, terrorist attacks, and crime; and can also operate in isolation from each other, capable of processing 30,000 simultaneous transactions and 100 billion computations per second.
It is the second-largest payment group in the world, behind China UnionPay.
Last year, Visa teamed up with a neobank First Boulevard committed to building generational wealth for Black Americans. Through their partnership, the companies plan to trade and hold digital assets via the digital asset platform Anchorage Digital.
Visa also announced its support for USDC last year, allowing consumers to settle transactions using the stable coin on its network.
Visa reported earnings in April that showed robust strength fueled by rapid travel recovery. Visa stock price trades 2% in the red YTD.
Financial giant Goldman Sachs is advising its clients to buy stable stocks and hide from the rising volatility that continues to batter long-duration stocks and the growth-oriented parts of the stock market.
Beat The Market With Our Expert Stock Picks
If you invested in 10 of our featured stock picks over the last 5 years, your chances of beating the market would be 90%.
Our last 3 stock picks grew a combined 348% after our alert!
Want to be notified the next time we issue a “Big Buy” alert or update our stocks to buy list? Sign up below today.
Following recent media reports that the healthcare company CVS Health Corp (NYSE: CVS) is in advanced discussions to acquire home-healthcare provider Signify Health (NASDAQ: SGFY) for roughly $8 billion, two companies confirmed the deal on Monday. CVS agreed to...
Nvidia shares dropped on Wednesday after the United States government limited sales of top AI chips to China. The tech company claims that its A100 and H100 high-performance AI chips would be impacted by the limitation in order to lessen the possibility that the...
September 6, 2022, World Wrestling Entertainment (NYSE: WWE) and Live Nation Entertainment, Inc. (NYSE:LYV) These two entertainment juggernauts have all the catalysts in the world pushing them as the best stocks to buy now. Just because American markets were closed on...
On the first day on the job, Oliver Blume informed the public that Volkswagen will quicken its transition to electric vehicles (EVs), but that the company has to find the correct "rhythm" as it makes the necessary changes. Blume revealed a ten-point strategy...
Lululemon Athletica shares increased by roughly 9% in after-hours trading Thursday, as the company announced quarterly earnings and revenue that exceeded analysts' estimates. U.S.-Canadian retailer reported better-than-expected results despite rising costs hurting...
Shares of Best Buy (NYSE: BBY) are down over 5% this week after the retailer reported a 13% drop in sales for the second quarter on Tuesday as consumers grew weary of inflation-driven price increases. How Did Best Buy Perform in Q1? Despite the sales...
September 2, 2022, Signet Jewelers Limited (NYSE:SIG) and Pure Storage, Inc. (NYSE:PSTG) Despite selling off following decent earnings, these two companies have considerable upside as the best stocks to buy now. As recession risks mount, the market is amid a...
Shares of the Chinese manufacturer of electric vehicles, XPeng (NASDAQ: XPEV), are trading over 20% lower in August after the EV company disclosed a wider-then-anticipated loss for the second quarter and disappointing delivery expectations. How Did XPeng...
September 1, 2022, Scorpio Tankers Inc. (NYSE:STNG) and EOG Resources, Inc. (NYSE:EOG) Singled out by a legendary growth investor, these energy standouts have more room to run as the best stocks to buy now. Investors appear to be in full-blown panic mode. The...
Shares of Dell Technologies (NYSE: DELL) fell to their lowest level since 2018 earlier this week after the technology company reported solid Q2 results but warned of a significant slowdown in the second half of the year as raging inflation continues to weigh on...