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5 Low-Beta Stocks to Buy as Consumer Confidence Ebbs in June
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Americans are struggling to assess the future of the economy, which is shaking their confidence level. The optimism surrounding the economy’s health that was seen in May somewhat ebbed in June.
The Conference Board said on Jun 25 that U.S. consumer confidence dipped to 100.4 in June from a downwardly revised 101.3 in May. However, it came in better than economists’ estimates of a decline to 100.
The Present Situation Index, a gauge of consumers’ assessment of current business and labor market conditions, rose to 141.5 in June from 140.8 in the previous month but the Expectations Index, a gauge of consumers’ short-term outlook for income, business, and labor market conditions, fell to 73 from 74.9 in May.
The expectations measure has remained below 80, the threshold typically indicating an impending recession, for five consecutive months.
Consumer regained their confidence in May after inflation showed signs of easing for the second straight month. However, uncertainty over the economy and a delay in the Federal Reserve’s planned rate cuts have been denting consumers’ confidence.
The Federal Reserve left interest rates unchanged in its June Federal Open Market Committee (FOMC) meeting. However, Federal Reserve Chairman Jerome Powell, in his post-FOMC statement, said that the Fed is likely to go for only one 25 basis point rate cut this year.
This is sharply lower than the three rate cuts indicated by the Fed in its March FOMC meeting. Fewer rate cuts mean higher interest rates for a longer period, which has raised concerns among consumers.
Markets have turned volatile over the past couple of weeks and this could continue for a longer period.
Our Choices
Given this situation, it would be wise to invest in defensive stocks like utilities and consumer staples. Five such stocks are California Water Service Group (CWT - Free Report) , Portland General Electric Company (POR - Free Report) , MDU Resources Group, Inc. (MDU - Free Report) , The Procter & Gamble Company (PG - Free Report) and Ingredion Incorporated (INGR - Free Report) .
Also, these belong to the category of low-beta stocks (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high-dividend yield and a favorable Zacks Rank.
California Water Service Group is one of the largest investor-owned water utilities in the United States. CWT has six subsidiaries — California Water Service, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, CWS Utility Services and HWS Utility Services.
California Water Service Group has an expected earnings growth rate of 246.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 21.6% over the last 60 days. California Water Service Group has a beta of 0.48 and a current dividend yield of 2.28%. Currently, CWT carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Portland General Electric Company is a vertically integrated electric utility that serves residential, commercial and industrial customers in Oregon. POR has more than a century of experience in power delivery. Portland General Electric Company generates power from a diverse mix of resources, including hydropower, coal and natural gas.
Portland General Electric Company has an expected earnings growth rate of 29.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. POR presently carries a Zacks Rank #2. Portland General Electric Company has a beta of 0.58 and a current dividend yield of 4.69%.
MDU Resources Group, Inc. provides value-added natural resource products and related services that are essential for energy transportation and regulated energy delivery services to its customers.
MDU Resources has an expected earnings growth rate of 3.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. MDU currently carries a Zacks Rank #2. MDU Resources has a beta of 0.77 and a current dividend yield of 1.95%.
The Procter & Gamble Company is a branded consumer products company that markets its offerings in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce, high-frequency stores and pharmacies. PG has operations in approximately 70 countries.
The Procter & Gamble Company has an expected earnings growth rate of 11% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. PG currently has a Zacks Rank #2. The Procter & Gamble Company has a beta of 0.42 and a current dividend yield of 2.39%.
Ingredion Incorporated is an ingredients solution provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion Incorporated’s expected earnings growth rate for the current year is 3.6%. The Zacks Consensus Estimate for the current-year earnings has improved 1.5% over the past 60 days. INGR presently carries a Zacks Rank #2. Ingredion has a beta of 0.74 and a current dividend yield of 2.68%.
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5 Low-Beta Stocks to Buy as Consumer Confidence Ebbs in June
Americans are struggling to assess the future of the economy, which is shaking their confidence level. The optimism surrounding the economy’s health that was seen in May somewhat ebbed in June.
The Conference Board said on Jun 25 that U.S. consumer confidence dipped to 100.4 in June from a downwardly revised 101.3 in May. However, it came in better than economists’ estimates of a decline to 100.
The Present Situation Index, a gauge of consumers’ assessment of current business and labor market conditions, rose to 141.5 in June from 140.8 in the previous month but the Expectations Index, a gauge of consumers’ short-term outlook for income, business, and labor market conditions, fell to 73 from 74.9 in May.
The expectations measure has remained below 80, the threshold typically indicating an impending recession, for five consecutive months.
Consumer regained their confidence in May after inflation showed signs of easing for the second straight month. However, uncertainty over the economy and a delay in the Federal Reserve’s planned rate cuts have been denting consumers’ confidence.
The Federal Reserve left interest rates unchanged in its June Federal Open Market Committee (FOMC) meeting. However, Federal Reserve Chairman Jerome Powell, in his post-FOMC statement, said that the Fed is likely to go for only one 25 basis point rate cut this year.
This is sharply lower than the three rate cuts indicated by the Fed in its March FOMC meeting. Fewer rate cuts mean higher interest rates for a longer period, which has raised concerns among consumers.
Markets have turned volatile over the past couple of weeks and this could continue for a longer period.
Our Choices
Given this situation, it would be wise to invest in defensive stocks like utilities and consumer staples. Five such stocks are California Water Service Group (CWT - Free Report) , Portland General Electric Company (POR - Free Report) , MDU Resources Group, Inc. (MDU - Free Report) , The Procter & Gamble Company (PG - Free Report) and Ingredion Incorporated (INGR - Free Report) .
Also, these belong to the category of low-beta stocks (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high-dividend yield and a favorable Zacks Rank.
California Water Service Group is one of the largest investor-owned water utilities in the United States. CWT has six subsidiaries — California Water Service, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, CWS Utility Services and HWS Utility Services.
California Water Service Group has an expected earnings growth rate of 246.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 21.6% over the last 60 days. California Water Service Group has a beta of 0.48 and a current dividend yield of 2.28%. Currently, CWT carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Portland General Electric Company is a vertically integrated electric utility that serves residential, commercial and industrial customers in Oregon. POR has more than a century of experience in power delivery. Portland General Electric Company generates power from a diverse mix of resources, including hydropower, coal and natural gas.
Portland General Electric Company has an expected earnings growth rate of 29.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the last 60 days. POR presently carries a Zacks Rank #2. Portland General Electric Company has a beta of 0.58 and a current dividend yield of 4.69%.
MDU Resources Group, Inc. provides value-added natural resource products and related services that are essential for energy transportation and regulated energy delivery services to its customers.
MDU Resources has an expected earnings growth rate of 3.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the last 60 days. MDU currently carries a Zacks Rank #2. MDU Resources has a beta of 0.77 and a current dividend yield of 1.95%.
The Procter & Gamble Company is a branded consumer products company that markets its offerings in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores, drug stores, department stores, distributors, baby stores, specialty beauty stores, e-commerce, high-frequency stores and pharmacies. PG has operations in approximately 70 countries.
The Procter & Gamble Company has an expected earnings growth rate of 11% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. PG currently has a Zacks Rank #2. The Procter & Gamble Company has a beta of 0.42 and a current dividend yield of 2.39%.
Ingredion Incorporated is an ingredients solution provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion Incorporated’s expected earnings growth rate for the current year is 3.6%. The Zacks Consensus Estimate for the current-year earnings has improved 1.5% over the past 60 days. INGR presently carries a Zacks Rank #2. Ingredion has a beta of 0.74 and a current dividend yield of 2.68%.