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3 Stable Low-Beta Stocks to Buy During Volatile Markets

Benjamin Rains
Markets began to rebound on Monday after their worst week in nearly two years. The Dow Jones Industrial Average and the S&P 500 both climbed over 1.30%. Still, analysts are divided over whether the recent sell-off is over just yet.

Markets began to rebound on Monday after their worst week in nearly two years. The Dow Jones Industrial Average and the S&P 500 both climbed over 1.30%. Still, analysts are divided over whether the recent sell-off is over just yet.

Concern that the Fed will raise interest rates faster than initially expected on the back of the first jobs report of 2018 is one possible reason for the pullback. A simple market correction, amid what has been a historic run, is another possibility.

Whatever the case may be, no one is sure if the worst is over right now. With that said, investors should consider looking for stocks that have proven to be less volatile compared to the market as a whole.

One tool we can turn to here is a stock’s beta rating, which is a representation of how a security responds to rapid swings in the market. Historically, stocks and securities with betas below 1.0 are less volatile than the market.

Let’s look at three low-beta stocks to consider now.

1.       Cigna Corporation CI

Cigna is an American health and life insurance giant that is currently a Zacks Rank #2 (Buy) and rocks an overall “B” VGM grade. The stock’s earnings estimates have been trending upward on strong revision agreement for the current quarter, current fiscal year, and the following fiscal year.

Investors should also be happy to note that Cigna has matched or topped earnings estimates all but once over the last three years. The company’s bottom-line is projected to expand at a healthy annualized rate of 12.90% over the next three to five years. And during these recent uncertain times, Cigna’s beta of 0.45 theoretically presents less volatility compared to the market average.

2.       Burlington Stores, Inc. BURL

This off-price department store sells far more than coats, and its name is iconic throughout the industry. Burlington is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Growth and an overall “B” VGM score. Burlington’s beta of 0.48, which is calculated using data over a five-year period, means that the company is less volatile compared to the market as a whole, in theory.

Burlington has also been on a hot streak when it comes to topping or meeting earnings expectations. The company has achieved this feat every quarter since the start of 2014, with an average surprise of over 15% in the trailing four periods. Looking down the road, investors should note that Burlington is projected to expand its EPS figure at an annualized rate of 18.65% over the next three to five years.

3.       Anthem, Inc. ANTM

Analysts have shown strong agreement when it comes to upping earnings estimates for this Indianapolis, Indiana health insurance and HMO powerhouse over the last 60 days. This has helped Anthem earn its current Zacks Rank #2 (Buy) rating. The company also boasts an “A” grade for Momentum and has topped quarterly earnings expectations by an average of 9.60% over the last four quarters.

Anthem also currently rocks a beta of 0.83, which should help show investors that the HMO provider is a relatively stable investment compared to the average stock on the market. The company also looks poised to steadily grow its bottom-line over the next three to five years, helping further demonstrate its solid overall fundamentals.

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Cigna Corporation (CI) : Free Stock Analysis Report
 
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