7 Wise Stock Picks for the Risk-Averse Investor
The allure of risk-averse stocks remains as pronounced as ever, given the current headwinds facing the stock market. This volatile environment and economic indicators clouded by uncertainty pave the way for an investment strategy rooted in caution yet poised for growth.
Drawing insights from the GuruFocus Screener, I have handpicked a collection of stocks with beta values under 0.5 and a GF Value Rank above 7. The low beta underscores these stocks’ immunity against market swings, offering stability in these challenging times. Meanwhile, the GF Value Rank, a unique blend of historical valuations, past achievements, and forward-looking growth expectations, highlights their latent upside. Hence, amidst the macroeconomic whirlwinds, these risk-averse stocks stand out as a testament to the savvy investor’s quest for solidity in an unpredictable world.
Newmont Mining (NEM)
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Newmont Mining (NYSE:NEM) stands tall as a beacon of prosperity and resilience in the glittering realm of gold mining. Despite facing myriad operational challenges, from strikes and setbacks to wildfires, the company’s strategic management tells a tale of unwavering resolve. Moreover, acquiring Newcrest assets is perhaps a masterstroke, infusing Newmont’s portfolio with top-tier mines, unlocking synergies, and paving the way for sizeable cost efficiencies.
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Navigating through the turbulence, Newmont emerges even stronger, with fourth quarter (Q4) revenues surpassing estimates by a whopping $613 million, and EPS outperforming expectations by six cents. Such stellar performance, underscored by a Non-GAAP EPS of $0.50 and a 24% year-over-year (YOY) surge in sales to $4 billion, positions Newmont on a golden pedestal. Additionally, with gold prices on an upward trajectory, Newmont’s forecast of 35% production growth promises to enrich shareholder value.
Tenable Holdings (TENB)
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Tenable Holdings (NASDAQ:TENB) is often an overlooked cybersecurity firm, emerging as a fortress of innovation and resilience in its niche. With its cybersecurity offerings safeguarding over 40,000 enterprises globally, including a prestigious clientele encompassing over 60% of the Fortune 500, Tenable is a heavyweight that’s tough to ignore.
The company has impressively grown its top-line by 27% on average in the past five years, demonstrating a remarkable blend of growth and efficiency. However, it isn’t resting on its laurels, delivering another solid quarterly performance in Q4 2023. Its results were marked by an adjusted earnings of 25 cents per-share on revenues of $213.3 million, comfortably beating analyst estimates. The addition of 597 new enterprise platform customers and 156 net new six-figure customers in Q4 clearly indicates Tenable’s growing appeal and market relevance. On top of that, it isn’t ignoring its shareholders, having initiated a massive $100 million share buyback program in November.
The First Bancorp (FNLC)
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2023 was a challenging year for bank stocks, but The First Bancorp’s (NASDAQ:FNLC) effectively navigated market headwinds with aplomb. Its total assets surged to $2.95 billion, underpinned by a massive $207.5 million increase. Moreover, this trajectory is further mirrored in the expansion of total loans, which climbed by an impressive 9.3% YOY, indicative of First Bancorp’s trust and reliability in the eyes of its customer base.
Despite the higher funding costs, which resulted in a 24.3% decrease in net income, the bank’s strategic financial management remains extraordinary, with a low Non-Performing Assets to Total Assets ratio of 0.07%. Also, with a robust liquidity profile capable potentially covering more than 150% of uninsured deposits from day one, adds further to its allure. Furthermore, the bank’s commitment to shareholder returns remains unwavering, with a forward dividend yield of 5.97% and a commendable five-year dividend growth rate of 11.1%.
Empire Company (EMLAF)
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Empire Company (OTCMKTS:EMLAF) has demonstrated resilience and growth potential in Canada’s competitive food retail market. Despite cybersecurity incidents and execution issues in the past, EMLAF stock trades attractively at just 0.3 times forward sales estimates. Moreover, it yields an enticing 2%, 33.4% higher than its 5-year average.
Moreover, its fiscal 2024 second quarter (Q2) showed Empire’s resolve with notable improvements. The strategic expansion of its FreshCo discount stores and investments in the Scene+ loyalty program promise greater customer engagement and improved competitive positioning.
Furthermore, the company’s proactive approach to modernizing its supply chain addresses previous margin pressures, setting the stage for sustainable long-term growth. With a solid dividend profile and a strategic pivot towards cost efficiency, Empire is poised to deliver for long-term investors.
Enterprise Products Partners (EPD)
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Enterprise Products Partners (NYSE:EPD) is a top player in traditional energy, offering key services across crude oil, natural gas, and natural liquid gas sectors. Though its stock is up modestly in the past year, EPD’s attractive dividend yield of over 7.5% stands on the robust foundation of 25 years of consecutive payout growth as of 2023.
Furthermore, its financial performance has shown remarkable strength, with a notable sales bump to $14.6 billion, reflecting a 7.1% YOY increase. This financial vigor is shown by its EPS surpassing expectations by four cents, achieving a 72-cent outcome. Additionally, this milestone is complemented by a 5.1% hike in cash distribution following the completion of $3.5 billion in capital growth projects, underscoring its effective capital management and expansion strategy. Moreover, it successfully launched two new natural gas processing plants in the latter half of 2023 highlighting robust demand for EPD’s services.
Altria (MO)
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Altria (NYSE:MO) presents an appealing proposition for income investors, trading at just eight times forward cash flows while offering a healthy dividend yield of roughly 9.3%. Despite encountering significant challenges, such as falling volumes due to sterner anti-smoking measures, it continues to report stable profits and maintain robust financial health.
Its financial resilience is shown by its commitment to shareholder returns by growing its adjusted diluted EPS by 2.3% in Q4. Moreover, its strategy to return value to shareholders was shown further by an allocation of roughly $7.8 billion towards dividends and share repurchases over the course of last year. Looking ahead, the company has set an adjusted diluted EPS growth target of 1% to 4% for the current year, with forecasts ranging between $5 to $5.15.
Furthermore, Altria continues to diversify its operations towards smoke-free alternatives by acquiring NJOY, a top smoke-free product company. Such acquisitions are likely to pay off immensely over the long term.
Polaris Renweable Energy (RAMPF)
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Polaris Renewable Energy (OTCMKTS:RAMPF) is a key player in the burgeoning Latin American renewable energy landscape. It boasts a diverse portfolio, including geothermal, hydroelectric, and photovoltaic solar projects. Most recently, it saw a 30% growth in power production, driven by its largest geothermal plant in Nicaragua, contributing 72% to its total power output. This growth is part of Polaris’s broader strategy to substantially increase its EBITDA in the coming years, targeting $100 million by 2028, up from $60 million today.
Moreover, Polaris stock is attractive at current prices, trading at a compelling 4.3 times cash flows, significantly lower than its peers. Also, it offers a 6.6% dividend yield supported by strong cash flows. Furthermore, with major capital-intensive projects completed, Polaris is set for notable EBITDA growth from new projects in Panama and the Dominican Republic, significantly enhancing its top-line growth.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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