Low-beta stocks can provide several beneficial advantages for portfolios, including stability, defensive qualities, and stabilization when combined with high-beta stocks, helping to provide a more balanced risk profile.
And for those seeking a less volatile approach, three low-beta stocks – Arch Capital Group (ACGL - Free Report) , Allison Transmission Holdings (ALSN - Free Report) , and Dr. Reddy’s Laboratories (RDY - Free Report) – could be considered. All three sport a favorable Zacks Rank, carry solid growth, and sport sound valuations.
Let’s take a closer look at each.
Arch Capital Group
Arch Capital Group, a current Zacks Rank #1 (Strong Buy), writes insurance, reinsurance, and mortgage insurance worldwide. Earnings expectations have jumped higher across the board, reflecting optimism among analysts.
Image Source: Zacks Investment Research
Shares aren’t expensive given the company’s forecasted growth, with earnings forecasted to climb nearly 40% in its current year on 30% higher revenues. Shares currently trade at an 11.6X forward earnings multiple (F1), beneath the 12.6X five-year median and the respective Zacks – Insurance industry average.
Image Source: Zacks Investment Research
It’s worth noting that the company has been a consistent earnings performer, exceeding Zacks Consensus Estimates in five consecutive quarters. In its latest release in late July, ACGL penciled in a 16% EPS beat and posted a positive 2.3% revenue surprise.
Allison Transmission Holdings
Allison Transmission is the largest producer of fully automatic transmissions for medium, heavy-duty commercial, and heavy-tactical U.S. defense vehicles. The company has seen positive earnings estimate revisions among all timeframes, landing it into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
ALSN shares could also attract those who prefer income, currently yielding 1.6% annually. And the company has been committed to increasingly rewarding shareholders, sporting a 10% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
The company’s current 8.4X forward earnings multiple certainly isn’t expensive, beneath the 9.5X five-year median and the 20.8X average of the Zacks – Autos/Tires/Trucks industry average. Allison Transmission is forecasted to see 25% EPS growth on 10% higher revenues in its current year.
Dr. Reddy’s Laboratories
Dr. Reddy's Laboratories, a current Zacks Rank #1 (Strong Buy), is an integrated global pharmaceutical company engaged in providing affordable and innovative medicines. No different than those above, the company has enjoyed favorable earnings estimate revisions.
Image Source: Zacks Investment Research
RDY shares presently trade at a 17.9X forward earnings multiple, reflecting a 41% discount relative to the Zacks – Drugs industry average and well below 2022 highs of 28.6X. The company is forecasted to see 15% EPS Growth paired with a 10% revenue bump in its current year (FY24).
Image Source: Zacks Investment Research
Like ALSN, income-focused investors could find RDY shares attractive, with shares currently yielding a respectable 0.6% annually paired with a sustainable payout ratio sitting at 9% of the company’s earnings. The payout has grown by 3.6% annually over the last five years.
Bottom Line
Low-beta stocks can provide many beneficial advantages for investors, including a more defensive nature and overall portfolio balance.
And for those seeking this approach, all three low-beta stocks above – Arch Capital Group (ACGL - Free Report) , Allison Transmission Holdings (ALSN - Free Report) , and Dr. Reddy’s Laboratories (RDY - Free Report) – could be great considerations.
All three sport a favorable Zacks Rank, carry sound valuation pictures, and sport solid growth profiles for their current and subsequent fiscal years.
Low-beta stocks can provide several beneficial advantages for portfolios, including stability, defensive qualities, and stabilization when combined with high-beta stocks, helping to provide a more balanced risk profile.
And for those seeking a less volatile approach, three low-beta stocks – Arch Capital Group (ACGL - Free Report) , Allison Transmission Holdings (ALSN - Free Report) , and Dr. Reddy’s Laboratories (RDY - Free Report) – could be considered. All three sport a favorable Zacks Rank, carry solid growth, and sport sound valuations.
Let’s take a closer look at each.
Arch Capital Group
Arch Capital Group, a current Zacks Rank #1 (Strong Buy), writes insurance, reinsurance, and mortgage insurance worldwide. Earnings expectations have jumped higher across the board, reflecting optimism among analysts.
Image Source: Zacks Investment Research
Shares aren’t expensive given the company’s forecasted growth, with earnings forecasted to climb nearly 40% in its current year on 30% higher revenues. Shares currently trade at an 11.6X forward earnings multiple (F1), beneath the 12.6X five-year median and the respective Zacks – Insurance industry average.
Image Source: Zacks Investment Research
It’s worth noting that the company has been a consistent earnings performer, exceeding Zacks Consensus Estimates in five consecutive quarters. In its latest release in late July, ACGL penciled in a 16% EPS beat and posted a positive 2.3% revenue surprise.
Allison Transmission Holdings
Allison Transmission is the largest producer of fully automatic transmissions for medium, heavy-duty commercial, and heavy-tactical U.S. defense vehicles. The company has seen positive earnings estimate revisions among all timeframes, landing it into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
ALSN shares could also attract those who prefer income, currently yielding 1.6% annually. And the company has been committed to increasingly rewarding shareholders, sporting a 10% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
The company’s current 8.4X forward earnings multiple certainly isn’t expensive, beneath the 9.5X five-year median and the 20.8X average of the Zacks – Autos/Tires/Trucks industry average. Allison Transmission is forecasted to see 25% EPS growth on 10% higher revenues in its current year.
Dr. Reddy’s Laboratories
Dr. Reddy's Laboratories, a current Zacks Rank #1 (Strong Buy), is an integrated global pharmaceutical company engaged in providing affordable and innovative medicines. No different than those above, the company has enjoyed favorable earnings estimate revisions.
Image Source: Zacks Investment Research
RDY shares presently trade at a 17.9X forward earnings multiple, reflecting a 41% discount relative to the Zacks – Drugs industry average and well below 2022 highs of 28.6X. The company is forecasted to see 15% EPS Growth paired with a 10% revenue bump in its current year (FY24).
Image Source: Zacks Investment Research
Like ALSN, income-focused investors could find RDY shares attractive, with shares currently yielding a respectable 0.6% annually paired with a sustainable payout ratio sitting at 9% of the company’s earnings. The payout has grown by 3.6% annually over the last five years.
Bottom Line
Low-beta stocks can provide many beneficial advantages for investors, including a more defensive nature and overall portfolio balance.
And for those seeking this approach, all three low-beta stocks above – Arch Capital Group (ACGL - Free Report) , Allison Transmission Holdings (ALSN - Free Report) , and Dr. Reddy’s Laboratories (RDY - Free Report) – could be great considerations.
All three sport a favorable Zacks Rank, carry sound valuation pictures, and sport solid growth profiles for their current and subsequent fiscal years.
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