Get ready for turbulence, because the stock market has become highly volatile after the Federal Reserve’s recent decision to increase interest rates by the largest amount in two decades. All major indices experienced significant declines, leaving investors shocked. It’s inevitable that every investor will experience a market crash during their lifetimes. Accordingly, with a potential market meltdown on the horizon, many investors are wondering what are the best stocks to buy.
Focusing on companies that can perform well in any market environment is a go-to strategy for many right now. For those searching for defensive stocks, narrowing down one’s list to the best high-quality blue-chip stocks is a great way to go.
Here are three such companies I think are relatively immune to a potential upcoming calamity. Let’s dive into these safe stocks to buy.
PepsiCo (PEP)
Looking for a stock with growth potential? Consider PepsiCo (NYSE:PEP), a well-known name among investors. Despite the volatile market, the company has reached all-time high levels, attracting investors with reliable earnings and steady cash flow.
PepsiCo is a major global food and beverage corporation based in Purchase, New York. The company offers a diverse range of products and brands such as Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods. PepsiCo operates in over 200 countries and territories, serving millions of customers worldwide.
Their organic sales surged 14% in Q1 2023 driven by strong consumer spending on snacks and beverages. The company expanded its revenue by $16 billion in the past two years, up 23%.
Consider adding PepsiCo to your portfolio for stability, income and potential sales growth. It’s a consumer staples giant that should be on your radar for 2023.
Newmont Corporation (NEM)
Despite the debate on the state of the economy, gold had a successful year, even with the Fed’s monetary tightening program in place. This should have been deflationary for gold, but it performed well, making Newmont Corporation (NYSE:NEM) an interesting option for stocks resistant to inflation.
NEM has a strong case for being an inflation-resistant stock due to its copper business, which is constantly in demand. Although its financials could use some improvement, analysts still consider it a strong buy with an average price target of $58.92, indicating a 21% upside potential.
Newmont has impressive high-quality assets with 96 million ounces of reserves, ensuring stable production in the years ahead. Their plan to reduce all-in-sustaining-cost over the next three years will also lead to EBITDA margin expansion, even if gold prices remain steady. With a stable investment-grade balance sheet, Newmont is positioned to create sustained shareholder value.
McDonald’s (MCD)
McDonald’s (NYSE:MCD) is a popular fast-food chain that really requires no introduction. The company’s success is largely due to the trade-down effect, where even during tough economic times, many households still seek to eat out. McDonald’s offers affordable food options without compromising quality, making it a compelling choice for many consumers.
Investing in McDonald’s is not only justified by its impressive past performance but also by its current success in passing on higher prices to consumers who remain willing to pay. This is in part due to operational improvements that have boosted efficiency and accuracy. Despite economic headwinds, the American consumer has continued to spend, suggesting that McDonald’s is poised for further growth. While the stock is near all-time highs, the focus on efficiency bodes well for continued gains.
McDonald’s financial performance is solid but not outstanding overall. Its revenue growth rate over the past three years is 3.8%, outpacing most of the restaurant industry. Additionally, it is consistently profitable, making it a good choice for dividend investors. Its net margin for the trailing year is 29.36%, which is higher than most sector players.
To sum up, McDonald’s Corporation has significant potential for growth, as it expands beyond its current market. It is expected to maintain its position as an industry leader through solid financial strategies and high growth potential. Investing in McDonald’s stock can provide stability to portfolios and exposure to a globally recognized brand.
On the date of publication, Chris MacDonald 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.
