3 Stable Stocks to Buy for Safe Returns Amid a turbulent macroeconomic climate, investors could turn to stable stocks to cushion their portfolio against the possibility of a recession later this year. Therefore, investors could look to buy...
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Amid a turbulent macroeconomic climate, investors could turn to stable stocks to cushion their portfolio against the possibility of a recession later this year. Therefore, investors could look to buy fundamentally strong, stable stocks Comcast (CMCSA), Coca-Cola HBC (CCHGY), and Columbus McKinnon (CMCO). Keep reading.
Given the high-interest rates, persistent inflation, and the risk of a credit squeeze in the banking sector, there are high expectations of a recession later this year.
Rather than getting caught up in the whirlwinds of market uncertainty, investors could consider investing in fundamentally strong, stable stocks Comcast Corporation (CMCSA), Coca-Cola HBC AG (CCHGY), and Columbus McKinnon Corporation (CMCO).
Before diving deeper into the fundamentals of these stocks, let's discuss why the stock market is expected to remain under pressure.
Despite easing for the tenth consecutive month in April, inflation remained above the Fed's 2% target. Moreover, the job market continues to stay strong. The personal consumption expenditures index (PCE) rose 0.4% sequentially and 4.7% from a year ago, higher than the 4.2% rise in March, potentially reinforcing the chances that interest rates could stay higher for longer.
With the Fed closely following the PCE index as its inflation gauge, there is now a 65.3% chance that the Fed will enact another quarter percentage point interest rate hike at its next meeting. Another rate hike could push the economy toward a recession.
Furthermore, the high borrowing rates and tighter lending standards stemming from the failure of the three banks will further increase the chances of a recession. Amid this uncertain macroeconomic backdrop, investing in the featured stable stocks could be wise for steady risk-adjusted returns.
Let's take a closer look at their fundamentals.
Comcast Corporation (CMCSA)
CMCSA operates as a media and technology company worldwide. It operates through Residential Connectivity & Platforms, Business Services Connectivity, Media, Studios, and Theme Parks segments. It has a 0.99 beta.
In terms of the trailing-12-month EBIT margin, CMCSA's 18.90% is 124.2% higher than the 8.43% industry average. Its 6.39% trailing-12-month Return on Common Equity is 97.3% higher than the 3.24% industry average. Likewise, its 9.74% trailing-12-month CAPEX/Sales is 146.9% higher than the industry average of 3.95%.
CMCSA's adjusted net income for the fiscal first quarter ended March 31, 2023, declined marginally year-over-year to $3.88 billion. The company's adjusted EBITDA increased 2.9% year-over-year to $9.42 billion. In addition, its adjusted EPS came in at $0.92, representing a 7% increase over the prior-year quarter.
CMCSA's EPS for fiscal 2023 is expected to increase marginally year-over-year to $3.67. Its revenue for the quarter ending June 30, 2023, is expected to increase 0.4% year-over-year to $30.15 billion. It has a commendable earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters.
The stock has gained 12.9% year-to-date to close the last trading session at $39.16.
CMCSA's strong fundamentals are reflected in its POWR Ratings. It has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Within the Entertainment - TV & Internet Providers industry, it is ranked first out of 9 stocks. The stock has a B grade for Stability and Quality. Click here to access all the ratings of CMCSA for Growth, Value, Momentum, and Sentiment.
Coca-Cola HBC AG (CCHGY)
Headquartered in Steinhausen, Switzerland, CCHGY engages in the production, distribution, and sale of non-alcoholic ready-to-drink beverages under franchise worldwide.
The company offers sparkling soft drinks, adult sparkling, hydration drinks, juices, ready-to-drink tea, energy drinks, dairy, coffee, water, plant-based drinks, premium spirits and flavored alcoholic beverages, and snacks. It has a 0.97 beta.
In terms of the trailing-12-month EBIT margin, CCHGY's 9.59% is 43.9% higher than the 6.67% industry average. Its 5.55% trailing-12-month levered FCF margin is 89.1% higher than the 2.93% industry average. Likewise, its 5.69% trailing-12-month CAPEX/Sales is 83% higher than the industry average of 3.11%.
CCHGY's Group net sales revenue for the first quarter ended March 31, 2023, increased 24.4% year-over-year to €2.20 billion ($2.36 billion). Its net sales revenue per unit case came in at €3.55, representing a 21.3% increase from the prior-year quarter.
The company's established markets net sales revenue increased 21.2% year-over-year to €696.60 million ($746.62 million). Its developing markets and emerging markets net sales revenue increased 24.2% and 26.6% year-over-year to €412.20 million ($441.80 million) and €1.09 billion ($1.17 billion), respectively.
CCHGY's revenue for the quarter ended June 30, 2023, is expected to increase 20.6% year-over-year to $3.03 billion. Over the past year, the stock has gained 31.7% to close the last trading session at $30.
CCHGY's positive outlook is reflected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It is ranked #17 out of 37 stocks in the A-rated Beverages industry. It has a B grade for Stability. We have also given CCHGY grades for Growth, Value, Momentum, Sentiment, and Quality. Get all CCHGY ratings here.
Columbus McKinnon Corporation (CMCO)
CMCO designs, manufactures, and markets intelligent motion solutions for moving, lifting, positioning, and securing materials worldwide. It offers hoists, winches, hydraulic jacks, trolleys, and its clamps, lifting tables, crane systems, material handling solutions, enclosed track rail systems, and rigging equipment, among other systems and products. It has a 1.23 beta.
On April 26, 2023, CMCO announced that the company has executed a definitive agreement to acquire montratec® GmbH, a leading automation solutions company that designs and develops intelligent automation and transport systems for interlinking industrial production and logistics processes.
CMCO's President and CEO, David J. Wilson, stated, "This acquisition is an excellent demonstration of our strategy to drive growth with stronger earnings power and further catalyzes the transformation of Columbus McKinnon as a leading intelligent motion solutions provider for material handling."
In terms of the trailing-12-month gross profit margin, CMCO's 36.54% is 22% higher than the 29.96% industry average. Its 14.70% trailing-12-month EBITDA margin is 11.2% higher than the 13.23% industry average. Likewise, its 7.82% trailing-12-month levered FCF margin is 50.5% higher than the industry average of 5.20%.
For the fiscal fourth quarter ended March 31, 2023, CMCO's gross profit increased 6.7% year-over-year to $91.20 million. The company's net income increased 17.5% year-over-year to $13.90 million. Moreover, its adjusted EBITDA increased 1% year-over-year to $39.70 million, while its adjusted EPS came in at $0.80, representing a 1.3% increase over the prior-year period.
CMCO's EPS for the quarter ending September 30, 2023, is expected to increase 0.7% year-over-year to $0.74. Its revenue for the quarter ending June 30, 2023, is expected to increase 7.5% year-over-year to $236.88 million. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 22.5% year-to-year to close the last trading session at $37.11.
CMCO's POWR Ratings reflect promising prospects. The stock has an overall rating of A, equating to a Strong Buy in our proprietary rating system.
It is ranked #4 out of 78 stocks in the A-rated Industrial - Machinery industry. It has a B grade for Value, Momentum, Stability, and Sentiment.
In total, we rate CMCO on eight different levels. Beyond what we stated above, we have also given CMCO grades for Growth and Quality. Click here to access all the ratings for CMCO.
The Bear Market is NOT Over…
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REVISED: 2023 Stock Market Outlook >
CMCSA shares were trading at $39.15 per share on Wednesday morning, down $0.01 (-0.03%). Year-to-date, CMCSA has gained 13.69%, versus a 9.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Malaika Alphonsus
Malaika's passion for writing and interest in financial markets led her to pursue a career in investment research.With a degree in Economics and Psychology, she intends to assist investors in making informed investment decisions.
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