The market hates uncertainty. And that’s why it’s smart to have safe stocks in your portfolio that will be shelter from any storms.
And speaking of storms, we’re seeing quite a season of them. From super heatwaves, fires and floods to busy hurricane and typhoon seasons, the past few months have been busy.
Then, add rising Covid cases, a market that’s seeing rising inflation and trade tensions with China. That’s a lot of uncertainty.
Stocks are twitchy. But you don’t have to be.
This is the ideal time to look for quality stocks that deliver a reliable dividend where you can keep making money, even when things get crazy. These companies aren’t sexy, but they’re reliable — and they’re good values now.
This is a pretty diverse list across a number of sectors, so there should be one or two that may fit well into your portfolio. Also, each of the following safe stocks to buy has an A rating in my Portfolio Grader:
International Paper (NYSE:IP)
ONEOK Partners (NYSE:OKE)
Regions Financial (NYSE:RF)
Safe Stocks to Buy: Bunge (BG)
When it comes to reliable businesses and safe stocks, BG is a good one to start with. It has been around for more than 200 years and remains a leader in its sector.
Its $11 billion market cap may seem small in these days of heady market caps, but its valuation is all about its business, not farflung extrapolations of its growth potential.
BG is a leading global agriculture player. From purchasing, storing and processing agricultural commodities — like turning soybeans or rapeseed into edible oils — to milling wheat into flour or converting sugar to ethanol, it does it all.
It’s also a leading potash and fertilizer company.
A growing global middle class — and growing population in general — means productivity is key and will remain so in this sector. And with two centuries under its belt, BG remains well positioned to be here in another 100 years. Also, with that history it certainly qualifies as a denizen of the safe stocks club.
BG is up 18% year-to-date, it has a 2.6% dividend and is trading at a current price-to-earnings ratio of 5x.
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Denim. Its origins are French. It was a fabric that was called “serge de Nimes.” Nimes was the town where it originated. The name was shortened to “de Nimes” and then to denim.
In the U.S., it hit the big time in 1853 when people began using the fabric to make tough clothes for the prospectors in California during the Gold Rush.
BKE is a leading retailer of denim clothing since its early days in Nebraska in 1948. Today it has 449 stores in 42 states. It also was quick to adopt online retail as well. It built its first online store in the late 1990s.
The stock only has a $2 billion market cap, so it flies under the radar of big institutional investors and isn’t sexy enough for momentum traders. It’s just one of those steady performers that doesn’t get a lot of attention.
BKE is up 48% year-to-date and provides a healthy 2.9% dividend and is trading at a current P/E of 10x.
International Paper (IP)
At a spry 123 years of age, this paper and pulp company started under President William McKinley, at the beginning of the Spanish-American War.
Yet one thing remains the same: The growing demand for paper and packaging products. Today, many top engineering schools even offer product packaging as a major. And given the challenges that plastic waste represents more companies are looking to wood-based packaging.
Also, the growing trend in e-commerce also creates big demand for wood-based packaging materials.
With a market cap of $23 billion, IP is a big player in this sector. The stock is up 18% year-to-date and it has a reliable 3.5% dividend and a decent current P/E of 23x.
Safe Stocks to Buy: ONEOK (OKE)
Usually, you don’t find a lot of energy stocks on safe stocks lists because the energy patch is very volatile, even in good times. And right now, good times aren’t where we are yet.
The key reason OKE is included with these safe stocks is because it’s a very focused player in a key growth sector — natural gas. Not only is natural gas (and fractionated natural gas liquids (NGLs)) one of the fastest growing fuels in the U.S., it’s also heavily in demand in Europe and Asia.
That means there’s a big market domestically and an even bigger market globally. What’s more, as export demand increases, domestic prices usually rise.
OKE operates pipelines in and around some of the biggest natural gas fields and distribution points in the U.S. That means it gets paid for its pipes rather than solely depending upon the price of the commodity.
OKE has a market cap just under $24 billion, so it’s well established. The stock is up 39% year to date yet has a P/E of 20x and a massive 6.9%. Just remember, the energy patch has more twists and turns than most sectors.
Regions Financial (RF)
If you’re interested in more conventional safe stocks, how about a leading regional bank that has $129 billion under management and operates in 16 states from Texas to Iowa to Virginia to Florida.
RF is a significant regional bank. And the states it serves are diverse, which means it doesn’t depend on a particular region for all of its opportunities. Plus, many of the states where RF operates are seeing growth as people leave big cities for smaller cities as work-from-home grows. That means more mortgages, business loans and auto loans.
RF has a $18 billion market cap, and a sturdy 3.5% dividend. The stock is up 21% year to date yet RF has a current P/E of 7x.
Safe Stocks to Buy: Navient (NAVI)
If you’ve heard of Sallie Mae, then you likely know NAVI. You see, in 2014 split in two. One became Sallie Mae Bank. The other became NAVI.
Today, NAVI manages more than 25% of student loans in the market. It’s the processor for all the educational loans for its sibling. It also provides processing services for healthcare, education and governments at the state, local and federal level.
Because it provides the lower profile back-end solutions for all these financing activities, it doesn’t get much press individual investors see. But institutional investors love this stock.
NAVI is up more than 104% year to date, yet it trades at a current P/E just below 4x. It also distributes a reliable 3.2% dividend.
On the date of publication, Louis Navellier has positions in BG and BKE. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.