7 Safest Stocks for this Newly Volatile Market

NYSE: PFE | Pfizer, Inc.  News, Ratings, and Charts

PFE – It looks like time for Risk Off stocks like PFE, PM and EPD to shine. Discover the great appeal of these stocks at this time.

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Bulls perhaps too giddy bidding up stocks to record highs

Now the trade war is heating up again

And Monday’s 48.1 ISM Manufacturing points to a slowing economy

Add all this together and you understand why stocks have been so volatile this past week.  That’s because we are truly having a battle for control of the market.

The bulls have been in charge for the past two months. But, unfortunately, there are growing concerns that bears are finally ready to take the helm for a while.

No…I am not making a bear market call. I am saying that investors will find it hard to push stocks to new highs without a trade deal in hand. Because the signing of that deal is becoming more difficult than previously understood.

The answer for investors is to add some safer stocks to their portfolios. The kind that thrive in these environments that hail from more conservative industries and offer attractive dividend payouts.

Pfizer (PFE - Get Rating) is the perfect example. This $210 billion pharma giant is the poster child for “slow and steady wins the race”. That can be seen by ample gains that have unfolded since the August lows.

Beyond the ample 3.8% dividend yield PFE also offers a better than average value proposition as the average target price is about 10% above current levels. However, that is only the average target. Top rated analyst, Steve Scala, from Cowen sees shares of Pfizer more properly valued at $48. Meaning that Pfizer is not just a safe dividend stock, but also has nice capital appreciation potential.

Those looking for the most attractive dividend will want to focus on Phillip Morris (PM) @ 5.64% dividend yield and pipeline player, Enterprise Products (EPD) @ 6.89% yield. EPD also rings the bell with the best value proposition at 35% upside to it’s Wall Street target price.

In all I have found 7 safe stocks with attractive qualities to outperform in this volatile market environment.

  • POWR Rating of A or B = Best proof of a stocks timeliness & momentum
  • Large caps only ($10 billion market cap or higher)
  • 3%+ dividend yield. We want it well above the S&P average dividend yield and 10 year Treasury yield. And thus a beacon for income seeking investors. Note that we have some clocking in over 6% dividend yield.
  • Defensive industries only: Consumer Staples, Medical, Utilities (includes telecom and pipelines). These are the ones that investors cling to when the “stuff hits the fan”.
  • Average earnings beat greater than 0% the past 4 quarters. This is meant to show a consistency of earnings quality with little risk of faltering in the future.
  • Minimum 8% upside from current price to average target price. You’d be surprised how much this criteria narrowed up the list because the low rate environment has led to many of these stocks being bid up beyond fair value. Gladly each of these stocks has 9.6% to 35.3% upside potential to fair value.

What should stand out from the list above is how many more parameters I put in. About 2X more than most of my research studies. That’s because I am really narrowing down to the stocks with the most positives and thus the least question marks. Those are the ones investors will run to during these “Flight to Safety” times.

It’s time to check out these top 7 safest stocks. Be sure to click on the ticker for each to research further. Remember that the POWR Ratings system has 4 component elements that helps you explore the full attractiveness of the stock.

Company Tkr Market Cap ($mil) Div Yield % Avg EPS Surp % Price Target Upside
   Pfizer PFE $210,573 3.78 8.73 $38.05 $41.71 9.62%
   Philip Morris PM $129,091 5.64 8.39 $82.97 $93.25 12.39%
   Enterprise Products EPD $56,218 6.89 9.85 $25.68 $34.75 35.32%
   Crown Castle CCI $55,775 3.35 6.93 $134.15 $147.13 9.68%
   American Electric AEP $44,890 3.08 5.00 $90.88 $102.14 12.39%
   Fortis FTS $17,641 3.66 4.14 $39.39 $44.21 12.24%
   Shaw Comm. SJR $10,027 4.45 9.12 $20.22 $23.09 14.19%

 

Want more great stock picks? Then check out these additional resources:

List of Best High Yield Dividend Stocks

About POWR Ratings

Reitmeister Total Return portfolio

 


PFE shares were trading at $38.07 per share on Wednesday afternoon, up $0.02 (+0.05%). Year-to-date, PFE has declined -9.55%, versus a 26.52% rise in the benchmark S&P 500 index during the same period.

 


About the Author: Steve Reitmeister


Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PFEGet RatingGet RatingGet Rating
AEPGet RatingGet RatingGet Rating
CCIGet RatingGet RatingGet Rating
EPDGet RatingGet RatingGet Rating
PMGet RatingGet RatingGet Rating

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