SPECIAL REPORT The Top 7 Stocks for 2024

Q4 2023 Strategy: The 7 Best Stocks to Stabilize Your Portfolio in Market Turmoil

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  • Walmart (WMT): Basking in a robust 35% surge in marketplace advertising and consecutively surpassing earnings expectations in the past four quarters, Walmart dazzles as a resilient retail titan.
  • PepsiCo (PEP): With a sizzling Q2 Non-GAAP EPS beating expectations and projecting an optimistic 10% organic revenue growth for 2023, PepsiCo remains a robust, dividend-generous investment during fickle economic times.
  • Microsoft (MSFT): Microsoft, with a stellar 36.5% YTD return and a transformative $10 billion investment in AI through OpenAI, demonstrates a path toward a $500 billion revenue goal by 2030.
  • Continue reading the list of the best stocks to buy for stability!
best stocks to buy for stability - Q4 2023 Strategy: The 7 Best Stocks to Stabilize Your Portfolio in Market Turmoil

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In 2023, the stock market has dazzled and daunted investors with highs and lows, prompting conversations that reverberate through the financial corridors over the best stocks to buy for stability. It’s a pivotal discourse as Wall Street recently took a significant tumble, shedding light on the downside of a seemingly robust job market.

As the S&P 500 cascaded to a sobering four-month low, the focus is towards low-volatility strategies. The shifting focus embodies a pragmatic approach that seeks to navigate through the windstorms. Even while stocks have waned under the mighty pressure from climbing Treasury yields in the bond market, these low-volatility maneuvers were crafted to minimize losses during these market troughs while enabling opportunities for upside. With that said, let’s look at seven stable stocks that should help you ride out the market volatility with aplomb.

Walmart (WMT)

Walmart (WMT) logo on a store front
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Walmart (NYSE:WMT) is effectively defying the gloom of the recession, sparkling as a stronghold in the retail sphere and emerging as a stable pick during economic downturns. The latest data gleams with optimism, revealing a promising landscape where factors including employment stability and disinflation are elegantly dancing with wage increases, sculpting a favorable environment for consumer behavior.

Peering into Walmart’s eCommerce and marketplace segments, a blossoming picture shows a robust 35% surge in advertising within the marketplace, a growing digital bazaar showing a staggering selection of approximately 400 million items. Moreover, the diligent stride of Walmart+, coupled with other membership initiatives, weaves a tapestry of personalized marketing and data, pivoting toward organic repeat customers.

Investors might take comfort in knowing that the company’s earnings have comfortably beaten market expectations in the past four consecutive quarters. Thus, its metamorphosis into a beacon of reliability enables the firm to effectively stand as a historical and present reality, offering a semblance of stability.

PepsiCo (PEP)

Cans of PepsiCo's Pepsi soda are in a bucket of ice.
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Navigating the fickle terrains of the stock market, PepsiCo (NASDAQ:PEP) stands tall, etching its mark as one of the most resilient stocks to consider in anticipation of a recession. Its robust financial positioning, diverse product spread, and insatiable appetite for innovation highlight its prowess to navigate and shine amidst recessionary clouds. The allure of PEP stock is undeniable, with it trading at a sensible 21.4 times Non-GAAP future earnings, boasting a quarterly dividend of $1.27 per share, translating to a generous yield above 3%.

The crescendo of confidence reaches its peak with its second-quarter Non-GAAP EPS of $2.09 effortlessly overshadowing expectations by 13 cents. Revenues sizzle at $22.32 billion, surpassing forecasts by a whopping $590 million. Raising the performance bar, PepsiCo now projects an even brighter 2023, foreseeing a 10% organic revenue growth, a hike from its initial 8% outlook, and a 12% core constant currency EPS growth, marking a considerable leap from its prior 9% estimate.

Microsoft (MSFT)

The Microsoft logo outside a building representing MSFT stock.
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In the vast digital cosmos, Microsoft (NASDAQ:MSFT) continues to radiate brilliance with its unwavering growth and a vision set on the horizons of artificial intelligence (AI), quantum computing, and other tech verticals.

Furthermore, the company figures tell a compelling tale. With a stellar year-to-date return of 36.5%, the Redmond-based juggernaut unveils a sparkling fourth quarter report card which showed a net income vaulting up by 20% to touch $20.08 billion, and revenues clocking in at a robust $56.2 billion, marking an 8% year-over-year ascent. This performance not only trumps earnings expectations with a 5.6% surprise, but it paints the portrait of a company flourishing and evolving.

The grand narrative is further enriched by Microsoft’s aggressive foray into AI, underscored by its hefty $10 billion plunge into OpenAI, the ingenious minds behind ChatGPT. This strategic alignment, mirrored in integrations from Bing to expansive applications, showcases a harmonious blend of technology, bridging domains from the vast cloud to the vibrant gaming arena. Additionally, Microsoft looks forward, setting its sights on a towering goal of amassing annual revenues of $500 billion by 2030’s end.

American Water Works (AWK)

the interior of a water utility processing plant
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Amidst the ebb and flow of economic tides, American Water Works (NYSE:AWK) has established its position as a true bastion of reliability in the expansive public utilities space. This goliath provides critical water and wastewater services, catering to approximately 1,700 communities across 14 different states, reaching a vast user base of about 14 million.

Furthermore, with rising earnings witnessed this year, evidenced by growth in both second quarter and first-half metrics, the price amplifications are effortlessly eclipsing escalating costs. Additionally, impressive net income and EBITDA margins glisten at 22% and 53% year-over-year, respectively, crafting a compelling financial narrative.

Moreover, investing in it comes with a powerful dividend yield above 2.30% while boasting a 14-year history of dividend growth. Hence, AWK promises a voyage that is not only stable but remarkably prosperous for those who choose to embark upon it.

U.S. Bancorp (USB)

 

usbank (USB) logo on a bank during nighttime
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U.S. Bancorp (NYSE:USB) has proven to be resilient and adept amidst the banking sector’s tumult. Despite having been embroiled in this year’s vortex of sectorial turbulence, regional banking stalwarts have navigated through incredibly well, witnessing a resilient rebound in customer deposits.

Moreover, its savvy acquisition of  Mitsubishi UFJ Financial Group‘s (NYSE:MUFG) Union Bank last December fortified its customer base with an additional 1.2 million customers along with a loan portfolio augmented by $58 billion and a substantial $90 billion in deposits. A major uplift in the CET1 capital ratio post-acquisition further accentuates the bank’s robust financial positioning, demonstrating a measured improvement in its capital adequacy and reinforcing its financial stability amidst the chaos. Additionally, USB stock does not merely whisper promises of stability but bellows a potent declaration with a compelling dividend yield of 6% and a venerable 12-year history of payout growth.

Kimberly Clark (KMB)

Kimberly Clark (KMB) sign, positioned outside the world headquarters’ main entrance.
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Kimberly Clark (NYSE:KMB) is a seasoned player in the consumer staples arena and has been resilient despite the economic headwinds. Recent quarters have unfolded a new chapter of recovery with a second-quarter gross margin bump of 34% while delivering another earnings beat. Additionally, its management envisages organic growth sprawling between 3% to 5% for 2023, with adjusted EPS growth growing by 10% to 14%.

With an ‘A’ graded profitability profile, a sturdy year-over-year return on capital, and a net income margin of 20% and 8%, respectively, along with a vibrant $3.19 billion generated in cash operations, the company is crafting an enduring narrative. Hence, amidst the forest of investment options, Kimberly-Clark emerges as a venerable oak offering excellent stability.

Freeport-McMoRan (FCX)

Freeport-McMoRan sign on a Freeport-McMoRan office building in Phoenix, Arizona.
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Navigating through the mining territories, Freeport-McMoRan (NYSE:FCX) is a significant player in the copper industry, effectively bridging the gap between traditional mining and future-focused technological advancements. Extracting an impressive 4.2 billion pounds of copper last year, reflecting a nearly 10% uptick from 2021, FCX emphasizes the critical role of copper, highlighting its critical application in conductive materials. This positions the company to strategically capitalize on burgeoning U.S. infrastructure investments and a surging onshoring trend.

Moreover, the anticipatory rise in electricity demand, propelled by the widespread infusion of AI, paints a favorable backdrop. While copper prices stand to gain from China’s economic stimulus endeavors, FCX’s future financial performances are likely to be heartening, with an EPS ascension to $2.12 in 2024 from $1.69 in 2023.

Noteworthy is FCX’s pioneering integration of AI in mining; utilizing a machine-learning model to optimize production could usher in a new era of mining efficiency and profitability.

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.


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