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Wall Street Just Got Hammered: Grab 5 Ultra-Safe Stocks Now

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Tirthankar Chakraborty
·5 min read
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Wall Street registered a broad sell-off on Jan 27, with both the Dow and the S&P 500 ending up in the negative territory for 2021. For the year, the Dow is down 0.99% and has fallen for the fourth successive session. The broader S&P 500, in the meantime, is down 0.14% so far this year. The tech-heavy Nasdaq too took a beating and all the three major benchmarks saw their worst trading session yesterday since Oct 28, 2020, both in terms of point and percentage, per Dow Jones Market Data, as quoted in a MarketWatch article.

But interestingly, the broader market had been doing pretty well in recent times. For instance, the broader S&P 500 notched its record high just two days earlier. So, why did the markets tumble at a time when market pundits expect the Biden administration to shortly initiate stimulus measures to pep-up the economy? This is because Democrats’ slim majority in the Senate is now worried about how the package will be implemented.

However, some analysts believe that investors are now selling previously beaten-down stocks like GameStop Corp. GME that notched stupendous gains in recent times, thanks to some favor from an online community comprising individual investors. Notably, GameStop’s shares have soared more than 1700% this month.

But most importantly, stocks closed sharply lower yesterday following Fed Chair Jerome Powell’s comments that the road to economic recovery is long. Following the central bank’s first policy meeting this year, the Fed said that interest rates will remain near zero and the massive bond-buying program will stay unchanged. However, Powell stressed that it will take time for the economy to fully recover from the impact of the coronavirus pandemic. It’s true that the vaccine rollout may have given some optimism but it does face some supply chain issues. Moreover, it’s not just accommodative monetary policy that will help the economy chug along. Fiscal policy will also play a significant role in boosting the economy.

The Federal Open Market Committee stated that “the pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” as stated in a yahoofinance article.

5 Ultra-Safe Stocks to Add to Your Portfolio Now

With Wall Street experiencing recoil, it’s wise for investors to bet on stocks that offer risk-adjusted returns. Hence, it makes sense to invest in stocks that have a low-beta (ranges from 0 to 1).These stocks are actually less capricious than the broader market.

At the same time, such low-beta stocks also provide dividends indicating that they have immense financial strength to counter any upheaval in the broader market.

Also, stocks should be non-cyclical in nature. This is because their performance is not dependent on the activities in the broader market and their products are in steady demand irrespective of gloomy market circumstances. Such companies belong to the utility, consumer staples and healthcare sectors.

We have, thus, selected five stocks that fulfil the above criteria. These stocks also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Allete, Inc. ALE operates as an energy company. The company operates through Regulated Operations, ALLETE Clean Energy, and Corporate and other segments. The company provides regulated utility electric service in northeastern Minnesota. The company currently has a Zacks Rank #2, beta of 0.43 and a dividend yield of 3.9%. The Zacks Consensus Estimate for its current-year earnings has risen 1.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 9.6%.

CenterPoint Energy, Inc. CNP is a domestic energy delivery company that provides electric transmission & distribution, natural gas distribution and competitive natural gas sales and services operations. The company currently has a Zacks Rank #2, beta of 0.95 and a dividend yield of nearly 2.8%. The Zacks Consensus Estimate for its current-year earnings has moved up almost 6% over the past 60 days. The company’s expected earnings growth rate for the current year is 7.6%.

B&G Foods, Inc. BGS sells and distributes high quality, shelf stable, frozen food and household products across the United States. The company currently has a Zacks Rank #1, beta of 0.5 and a dividend yield of 5.6%. The Zacks Consensus Estimate for its current-year earnings has climbed 7.1% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is almost 37% and 2.6%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

McCormick & Company, Incorporated MKC is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors to the entire food industry across the globe. The company currently has a Zacks Rank #2, beta of 0.44 and a dividend yield of 1.4%. The Zacks Consensus Estimate for its current-year earnings has moved 2.1% up over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 5.7% and 3.9%, respectively.

Merck & Co., Inc. MRK provides healthcare solutions worldwide. The company currently has a Zacks Rank #2, beta of 0.43 and a dividend yield of 3.2%. The Zacks Consensus Estimate for its current-year earnings has risen 0.3% over the past 90 days. The company’s expected earnings growth rate for the next five-year period is 7.1%.

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CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
 
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
 
GameStop Corp. (GME) : Free Stock Analysis Report
 
McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report
 
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
 
Allete, Inc. (ALE) : Free Stock Analysis Report
 
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