7 Stable Stocks to Buy No Matter What Happens to Interest Rates


  • Home Depot (HD): Demand for home improvement won’t go out of style.
  • Duke Energy (DUK): You gotta pay the bills, which is why Duke Energy is relevant.
  • McDonald’s (MCD): Cheap eating should help bolster McDonald’s irrespective of rates.
  • If you’re pensive about the Fed’s next move, these are the stable stocks to consider.
Stable Stocks - 7 Stable Stocks to Buy No Matter What Happens to Interest Rates

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While avoiding a recession last year boosted sentiment for 2024, concerned investors may still want to consider stable stocks. You just don’t know what might happen next. For example, who would have thought that the regional banking crisis would erupt? And the worrisome thing is that some experts believe we’re not necessarily out of the woods yet.

Also, targeting interest rate-proof stocks presents a sensible strategy because of certain conflicting economic data. Mainly, the U.S. jobs market continues to astound onlookers with its resilience. But with more dollars chasing after fewer goods, that might not be an appropriate time to lower interest rates. After all, that would presumably accelerate inflation.

Now, I’m not going to whip out a crystal ball and start making a bunch of predictions. They’ll probably be wrong anyways. What I am arguing for is diversification. Go ahead and add some speculative ideas to your portfolio. But also keep in mind these stable stocks to buy. Again, you just never know what may lie around the corner.

Home Depot (HD)

an interior view of a house attic under construction
Source: ronstik / Shutterstock.com

You gotta love Home Depot (NYSE:HD) as one of the stable stocks to put in your portfolio. No, it’s not the most exciting enterprise – not even close. However, the reality is that the smelly stuff tends to arise when you own a home.

And by the way, people bought a ton of homes during the low-interest-rate environment of 2020 and 2021. These new homeowners are probably now finding out how much of a pain the American Dream really is.

Well, you can cry about it or you can go to Home Depot. We’re talking about pure relevance here, making it one of the top interest rate proof stocks. Moreover, the company doesn’t just benefit from the everyday stuff that can go awry. Hurricanes, floods and other natural disasters are always awaiting homeowners in certain regions. Unless you envision a future where weather events go away, HD is permanently relevant.

Oh yeah, analysts love it, rating shares a consensus moderate buy with a max price target of $387.

Duke Energy (DUK)

The logo for Duke Energy (DUK) is seen on a sign at one of the company's offices.
Source: Jonathan Weiss / Shutterstock.com

Utility giant Duke Energy (NYSE:DUK) offers multiple advantages for stable stocks to buy. First, as a utility company, it benefits from “legalized extortion,” if you will. That sounds really awful but what I’m trying to say is that you can shirk your utility bills. Otherwise, the power goes out and that’s not something you want in a modern economy where everything is digitalized.

Second, Duke benefits from a natural monopoly. Because of the high barriers to entry – including stiff regulations – Duke is effectively entrenched in its core markets. And those markets (in the southern and eastern regions of the U.S.) are viable due to migration trends among millennials. Due to cost-of-living considerations, Duke is positioned where the money will be.

Further, the company makes a great case for interest rate proof stocks because of its forward dividend yield of 4.14%. If rates decline, Duke’s passive income will look mighty attractive. If rates stay the same or even increase, the company’s permanently relevant business model should shine.

McDonald’s (MCD)

McDonald's golden arches
Source: Vytautas Kielaitis / Shutterstock

Fast-food giant McDonald’s (NYSE:MCD) needs no introduction. It’s not just a sterling name among the broader retail brands. Rather, it’s a symbol of American-style capitalism. Therefore, I see McDonald’s as a permanently relevant idea for stable stocks. You’re probably not going to get rich off the idea. However, the global ubiquity of the Golden Arches makes it a comforting play in your portfolio.

Look at it this way. When interest rates shift significantly, they impact investments and also purchases of big-ticket items. Again, real estate boomed during the first two years of the Covid-19 pandemic. Basically, the Federal Reserve pushed interest rates lower. However, purchases of expensive items began taking a backseat once policymakers adopted a hawkish stance.

In other words, money became expensive and there was an incentive to save. However, that shouldn’t affect McDonald’s, where the underlying comfort food is (relatively) dirt cheap. And people will always want a gastronomic pick-me-up. Thus, MCD ranks among the interest rate proof stocks.

Kroger (KR)

Kroger (KR) Supermarket. The Kroger Co. is One of the World's Largest Grocery Retailers.
Source: Eric Glenn / Shutterstock.com

As a grocery giant, Kroger (NYSE:KR) makes an excellent case for stable stocks to buy. At the most cynical level, people need to eat. And therefore, Kroger benefits from the trade-down effect. That’s the phenomenon where consumers decline cutting spending cold turkey. Instead, they continue to spend but seek cheaper alternatives. Once an acceptable equilibrium between quality and price is met, they dive in.

Here’s the deal with KR stock: the underlying company effectively sits near the lowest rung of the trade-down ladder. Can you go lower than Kroger? Sure, you have discount dollar stores that offer $1 bread. I’m just not sure you’d want to eat such products unless you absolutely had to. And given the robust nature of the jobs market, that doesn’t seem to be the case.

Also, the clear advantage that Kroger has over the competition is its valuation. Right now, shares trade at a forward earnings multiple of 10.57X, lower than the sector median 15.7X. Also, the market prices KR at a trailing-year sales multiple of 0.23X, even though the company prints a three-year revenue growth rate of 10.3%, well above industry average. Thus, it’s one of the interest rate proof stocks.

Kenvue (KVUE)

Albuquerque, New Mexico / USA - November 2 2020: Boxes of Band-Aids in Walmart in the pharmacy and over-the-counter medication aisle. Kenvue (KVUE) split from JNJ and now owns the Band-aid brand.
Source: Giovanni Nastukov / Shutterstock.com

I’ve been talking about Kenvue (NYSE:KVUE) in multiple contexts so I don’t want to keep going down the same well. However, I really like KVUE as one of the stable stocks to buy, perhaps more so than Johnson & Johnson (NYSE:JNJ). Don’t get me wrong, I love J&J. However, it’s difficult to say that everyone would have access to the company’s pharmaceutical and medical technology units.

On the flipside, I have supreme confidence in Kenvue. I have this confidence because somewhere right now, someone just got a boo-boo: a papercut, a bee sting, whatever. And I also know that someone got sick or has a headache (from reading my articles, perhaps!). These folks will turn to consumer health products. And more than likely, I’d wager, they’re going to turn to brands they trust.

When you think about these brands – Band-Aid, Tylenol – we reach for them not just because we know them. They’re practically ingrained in our culture, our psyche. And so, when Precedence Research predicts that the global consumer healthcare market will hit $608.39 billion by 2032, Kenvue brands will likely be in the lead.

Microsoft (MSFT)

Microsoft logo close up. Microsoft (MSFT) Flagship Store Fifth Avenue, Manhattan, NYC.
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When you’re considering stable stocks for your portfolio, you generally think about boring enterprises. Frankly, it doesn’t get much more boring than Microsoft (NASDAQ:MSFT). Yes, the company did gain over 64% in the past 52 weeks: let’s give credit where it’s due. However, there’s some skepticism about whether it can pull off another brilliant run in 2024.

Still, if you had to go long for the long term, MSFT represents a very sensible bet. You can even set aside all the investments it has made in generative artificial intelligence. When it comes to nuts and bolts of academia and the professional ecosystem, the world runs on Microsoft. For example, Microsoft Windows dominates market share of desktop operating systems at 72.79%. The others don’t come close.

What does that tell you? Well, when people exchange spreadsheets and documents, they’re probably Microsoft-manufactured programs. Such dominance is probably not going to change anytime soon. Notably, analysts peg shares a consensus strong buy, making it one of the interest rate proof stocks to consider.

Amazon (AMZN)

Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock
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When you think of e-commerce, you think of Amazon (NASDAQ:AMZN). Basically, e-commerce as a concept has become synonymous with the Amazon brand. Conspicuously, AMZN gained over 68% of equity value in the past 52 weeks, a blistering performance. As such, it might seem unlikely that AMZN could deliver the goods again. However, I’d give it a strong look if you’re worried about interest-rate fluctuations.

For one thing, e-commerce transactions as a percentage of total retail sales continues to rise since the second quarter of 2022. Back then, the metric sat at 14.4%. In Q3 of last year, the index improved to 15.6%. That demonstrates that consumers still gravitate toward the convenience of online retail. As well, they’re buying products online even as interest rates rose.

For instance, the personal saving rate jumped from 3.4% in December 2022 to 5.3% in May 2023. That’s understandable because money became more expensive; thus, a reason for saving greenbacks existed. So, even with a tough consumer backdrop, e-commerce sales soard.

Basically, Amazon is interest rate agnostic. In that case, it’s one of the stable stocks to buy.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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