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4 Low-Beta Stocks With Upside to Counter a Volatile September
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Volatility has returned to Wall Street after a solid August. Several factors are responsible for weighing on investors’ sentiments. Also, September has traditionally been known as the worst month for stocks. Also, stocks have traditionally suffered in the two months leading up to the election.
Thus, it would be ideal to avoid volatile stocks and settle for low-beta consumer staples stocks like Carriage Services, Inc. (CSV - Free Report) , Edgewell Personal Care Company (EPC - Free Report) , Ingredion Incorporated (INGR - Free Report) and Flowers Foods, Inc. (FLO - Free Report) with a solid upside.
Weak Economic Data Dents Stock Performance
Soft economic data released over the past couple of weeks have reignited fears of a softening economy. Concerns over the economy’s health grew after data showed that the unemployment rate increased to 4.3% in July.
On Friday, fresh data showed that nonfarm payrolls increased just 142,000 in August, below the consensus estimate of a rise of 161,000. This added fuel to the fears of a softening economy.
Also, the Institute of Supply Management (ISM) manufacturing index declined for the fifth consecutive month in August. The Fed's Beige Book revealed that economic activity remained unchanged or even dropped in nine regions recently.
Following the jobs report on Friday, stocks tumbled, with the S&P 500 clocking its worst week since March 2023. The S&P 500 declined 4.3% for the week. The Nasdaq ended the week 5.8% lower, its worst week performance since 2022, while the Dow closed lower 2.9%.
Tricky September, Election Day Approaching
September has proven to be the worst month for Wall Street, with stocks underperforming. This has been happening since 1950, with the S&P suffering the most in September. Experts believe that this happens because, in September, investors return to work after the summer vacation and tend to readjust their portfolios. This weighs on markets as they tend to sell during this time.
Also, the two months leading to the Presidential election have historically seen markets turn volatile. The S&P 500 has suffered during this period since 2008, with an average negative return of 5.8%. With election day (Nov. 5) less than two months away, the volatility has started this time too.
Low-Beta Stocks to Play Safe
Given this situation, investors should draw a strategy to focus on low-risk assets and a combination of parameters that lead to better returns. The best way to do so is by banking on defensive stocks like consumer staples with low-beta (0 to 1) stocks with a high-dividend yield and a favorable Zacks Rank. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carriage Services
Carriage Services, Inc. is a leading provider of death care services and products in the United States. CSV provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.
Carriage Services has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the last 60 days. CSV presently sports a Zacks Rank #1. Carriage Services has a beta of 0.94 and a current dividend yield of 1.39%.
Image Source: Zacks Investment Research
Edgewell Personal Care Company
Edgewell Personal Care Company manufactures and markets personal care products. EPC’s brand consists of Schick and Wilkinson Sword men's and women's shaving systems and disposable razors; Edge and Skintimate shave preparations; Playtex, Stayfree, Carefree and o.b. feminine care products; Banana Boat and Hawaiian Tropic sun care products; Playtex infant feeding, Diaper Genie and gloves; Wet Ones moist wipes.
Edgewell Personal Care Company has an expected earnings growth rate of 17.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the last 60 days. EPC currently carries a Zacks Rank #2. Edgewell Personal Care Company has a beta of 0.87 and a current dividend yield of 1.57%.
Image Source: Zacks Investment Research
Ingredion Incorporated
Ingredion Incorporated is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion’s expected earnings growth rate for the current year is 5.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 60 days. INGR currently has a Zacks Rank #2. Ingredion has a beta of 0.73 and a current dividend yield of 2.31%.
Image Source: Zacks Investment Research
Flowers Foods
Flowers Foods, Inc. emphasizes on providing high-quality baked items, developing strong brands, making innovations to improve capabilities and undertaking prudent acquisitions. Along with these, FLO strives toward developing technology advanced bakeries.
Flowers Foods has an expected earnings growth rate of 4.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last 60 days. FLO currently has a Zacks Rank #2. Flowers Foods has a beta of 0.36 and a current dividend yield of 4.10%.
Image Source: Zacks Investment Research
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Volatility has returned to Wall Street after a solid August. Several factors are responsible for weighing on investors’ sentiments. Also, September has traditionally been known as the worst month for stocks. Also, stocks have traditionally suffered in the two months leading up to the election.
Thus, it would be ideal to avoid volatile stocks and settle for low-beta consumer staples stocks like Carriage Services, Inc. (CSV - Free Report) , Edgewell Personal Care Company (EPC - Free Report) , Ingredion Incorporated (INGR - Free Report) and Flowers Foods, Inc. (FLO - Free Report) with a solid upside.
Weak Economic Data Dents Stock Performance
Soft economic data released over the past couple of weeks have reignited fears of a softening economy. Concerns over the economy’s health grew after data showed that the unemployment rate increased to 4.3% in July.
On Friday, fresh data showed that nonfarm payrolls increased just 142,000 in August, below the consensus estimate of a rise of 161,000. This added fuel to the fears of a softening economy.
Also, the Institute of Supply Management (ISM) manufacturing index declined for the fifth consecutive month in August. The Fed's Beige Book revealed that economic activity remained unchanged or even dropped in nine regions recently.
Following the jobs report on Friday, stocks tumbled, with the S&P 500 clocking its worst week since March 2023. The S&P 500 declined 4.3% for the week. The Nasdaq ended the week 5.8% lower, its worst week performance since 2022, while the Dow closed lower 2.9%.
Tricky September, Election Day Approaching
September has proven to be the worst month for Wall Street, with stocks underperforming. This has been happening since 1950, with the S&P suffering the most in September. Experts believe that this happens because, in September, investors return to work after the summer vacation and tend to readjust their portfolios. This weighs on markets as they tend to sell during this time.
Also, the two months leading to the Presidential election have historically seen markets turn volatile. The S&P 500 has suffered during this period since 2008, with an average negative return of 5.8%. With election day (Nov. 5) less than two months away, the volatility has started this time too.
Low-Beta Stocks to Play Safe
Given this situation, investors should draw a strategy to focus on low-risk assets and a combination of parameters that lead to better returns. The best way to do so is by banking on defensive stocks like consumer staples with low-beta (0 to 1) stocks with a high-dividend yield and a favorable Zacks Rank. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carriage Services
Carriage Services, Inc. is a leading provider of death care services and products in the United States. CSV provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.
Carriage Services has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the last 60 days. CSV presently sports a Zacks Rank #1. Carriage Services has a beta of 0.94 and a current dividend yield of 1.39%.
Image Source: Zacks Investment Research
Edgewell Personal Care Company
Edgewell Personal Care Company manufactures and markets personal care products. EPC’s brand consists of Schick and Wilkinson Sword men's and women's shaving systems and disposable razors; Edge and Skintimate shave preparations; Playtex, Stayfree, Carefree and o.b. feminine care products; Banana Boat and Hawaiian Tropic sun care products; Playtex infant feeding, Diaper Genie and gloves; Wet Ones moist wipes.
Edgewell Personal Care Company has an expected earnings growth rate of 17.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the last 60 days. EPC currently carries a Zacks Rank #2. Edgewell Personal Care Company has a beta of 0.87 and a current dividend yield of 1.57%.
Image Source: Zacks Investment Research
Ingredion Incorporated
Ingredion Incorporated is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion’s expected earnings growth rate for the current year is 5.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 60 days. INGR currently has a Zacks Rank #2. Ingredion has a beta of 0.73 and a current dividend yield of 2.31%.
Image Source: Zacks Investment Research
Flowers Foods
Flowers Foods, Inc. emphasizes on providing high-quality baked items, developing strong brands, making innovations to improve capabilities and undertaking prudent acquisitions. Along with these, FLO strives toward developing technology advanced bakeries.
Flowers Foods has an expected earnings growth rate of 4.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last 60 days. FLO currently has a Zacks Rank #2. Flowers Foods has a beta of 0.36 and a current dividend yield of 4.10%.
Image Source: Zacks Investment Research