Last week, the equity market experienced a roller-coaster ride due to fears about the rapidly spreading COVID-19 omicron variant, lower-than-expected November jobs data, and uncertainties over the timing of monetary policy tightening. The major benchmark indexes ended the week with losses of 1% or more.
Last week, the IMF suggested ways to address inflationary pressure and uncertainties around global economic prospects. And with a new coronavirus strain rapidly spreading across the country, analysts are concerned about the pace of domestic economic recovery. So, the situation might drive higher market volatility in the coming weeks.
Amid these rising uncertainties, building a portfolio of low-beta stocks is important because these securities will generate steady returns and protect against choppy market conditions. So, we think low beta stocks Regeneron Pharmaceuticals, Inc. (REGN), ResMed Inc. (RMD), Telefonaktiebolaget LM Ericsson (publ) (ERIC), and Canon Inc. (CAJ), each with strong financials and solid growth attributes, could be ideal picks now.
Regeneron Pharmaceuticals, Inc. (REGN)
Tarrytown, N.Y.-based REGN is a biotechnology company that invents life-transforming medicines for patients with eye diseases, cancer, cardiovascular and metabolic diseases, hematologic diseases, infectious diseases, and rare diseases. EYLEA Injection, Dupixent Injection, Kevzara Solution, and ARCALYST Injection are some of the company’s marketed products. The stock has a 0.18 beta.
Last month, the European Commission had approved REGN’s REGEN-COV, the casirivimab, and imdevimab antibody cocktail, in the U.S., and Ronapreve in the European Union (EU) and other countries. Through this approval, the company believes that the countries should be able to adapt the cocktail as a therapy against COVID-19 to treat non-hospitalized patients already infected with the virus and to prevent infection in the first place.
REGN’s total revenues increased 50.5% year-over-year to $3.45 billion in the third quarter, ended September 30, 2021. The company’s income from operations grew 75.4% from its year-ago value to $1.85 billion. Its net income rose 84.5% from the prior-year quarter to $1.77 billion. Also, the company’s EPS increased 83.9% year-over-year to $15.37.
Analysts expect REGN’s revenue for its fiscal 2021 to be $15.44 billion, representing an 81.7% increase year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 124.7% in the current year. Its stock price has increased 37.6% over the past nine months.
REGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
Also, the stock has a B grade for Value, Quality, and Growth. We have also graded REGN for Sentiment, Stability, and Momentum. Click here to access all REGN’s ratings. REGN is ranked #7 of 472 stocks in the Biotech industry.
ResMed Inc. (RMD)
RMD in San Diego, Calif., provides innovative solutions to treat hospital outpatients. The company offers cloud-connected medical devices to people with sleep apnea, COPD, and other chronic diseases. Its comprehensive out-of-hospital software platforms also support professionals and caregivers. RMD operates healthcare systems in more than 140 countries. RMD has a 0.31 beta.
In August, RMD launched AirSense 11, the company’s next-generation PAP (positive airway pressure). This device has been designed to help people worldwide with sleep apnea start and stay on therapy to treat and manage obstructive sleep apnea.
During its fiscal first quarter, ended September 30, 2021, RMD’s revenue increased 20.2% year-over-year to $904 million. The company’s income from operations grew 20.7% from its year-ago value to $261.9 million. Its net income rose 19.7% from the prior-year quarter to $222 million. Also, the company’s EPS increased 18.9% year-over-year to $1.51.
RMD’s revenue is expected to increase 19.2% year-over-year to $3.81 billion in its fiscal 2022. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to increase 18.6% in the current year. The stock has gained 43.7% in price over the past nine months.
RMD’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. Also, the stock has a B grade for Growth, Stability, and Sentiment.
In addition to the POWR Rating grades I’ve just highlighted, one can see RMD’s ratings for Momentum, Value, and Quality here. The stock is ranked #33 of 171 stocks in the Medical – Devices & Equipment industry.
Telefonaktiebolaget LM Ericsson (publ) (ERIC)
Headquartered in Stockholm, Sweden, ERIC offers communication infrastructure, services, and software solutions to telecommunications and other industries. It operates through four segments: Networks; Digital Services; Managed Services; and Emerging Business and Other. The stock has a 0.11 beta.
This month, ERIC partnered with Nex-Tech Wireless to commercially launch Nex-Tech Wireless’s 5G capabilities in rural Kansas. The 5G capabilities should bring customers faster speeds, including lower latency and more capacity.
ERIC’s net income increased 3.6% year-over-year to SEK5.8 billion ($637.12 million) for the third quarter, ended September 30, 2021. The company’s net sales were SEK56.3 billion ($6.18 billion) during the period. Its EBIT grew 2.3% from its year-ago value to SEK8.8 billion ($966.66 million). Also, the company’s EPS rose 7.5% from the prior-year quarter to SEK1.73 ($0.19).
ERIC’s revenue for its fiscal 2021 is expected to be $26.52 billion, representing 5% year-over-year growth. Its EPS is expected to increase at an 11.1% rate in the current year. The stock has surged 1.6% in price over the past five trading days.
It is no surprise that ERIC has an overall B rating, which equates to a Buy in our POWR Rating system. Also, the stock has an A grade for Value and a B grade for Stability.
Canon Inc. (CAJ)
Headquartered in Tokyo, Japan, CAJ provides digital imaging solutions, plain paper copying machines, laser and inkjet printers, cameras, and lithography equipment. Its Office Business Unit; Imaging System Business Unit; Medical System Business Unit; and Industry and Others Business Unit are the company’s four operations. CAJ has a 0.56 beta.
This month, CAJ launched its CR-X300 4K Outdoor PTZ (pan-tilt-zoom) camera. The CR-X300 should support a wide range of communications standards and protect from environmental factors. It is an ideal remote PTZ camera system for video capture in outdoor settings like sports broadcasts, live events, and wild animal observation.
CAJ’s net sales increased 9.8% year-over-year to ¥833.32 billion ($7.34 billion) for the third quarter, ended September 30, 2021. The company’s operating profit grew 206% from its year-ago value to ¥58.73 billion ($516.94 million). Its net income rose 196.1% from the prior-year quarter to ¥49.32 billion ($434.1 million). Also, the company’s EPS increased 196% year-over-year to ¥47.15 ($0.42).
Analysts expect CAJ’s revenue for its fiscal 2021 to be $31.73 billion, representing 7.2% growth year-over-year. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Also, its EPS is expected to grow 139.2% in the current year. Its stock price has increased 23.3% over the past year and 19.9% year-to-date.
CAJ’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has a B grade for Quality, Value, and Stability.
In addition to the POWR Rating grades I have just highlighted, one can see CAJ’s ratings for Growth, Sentiment, and Momentum here. CAJ is ranked #4 of 52 stocks in the B-rated Technology – Hardware industry.
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REGN shares were trading at $641.56 per share on Wednesday afternoon, up $6.47 (+1.02%). Year-to-date, REGN has gained 32.80%, versus a 26.43% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...
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