From a massive stock market rally to a spectacular crash in the space of just two trading days, market turbulence defines today’s markets. As investors seek refuge, CNBC identifies buy-rated global stocks that have a track record of stability. To identify these stocks from the US and beyond, CNBC Pro looked to FactSet data on the historical volatility of MSCI World stocks and removed those that are more volatile than the index. CNBC then looked at stocks that have risen this year and paid a dividend of at least 2%. They also have a buy rating from most analysts who cover them, with average growth potential of at least 10% over the next 12 months, according to data from FactSet. A slew of utility stocks, long sought after during bouts of market volatility, appeared on screen. The sector has steady, regulated earnings, inflation-based contractual clauses, and higher dividend income relative to other sectors, making it a classic safe haven during periods of market turmoil. The sector has beaten an otherwise volatile market this year. It was one of only two S&P 500 sectors whose shares rose in the first quarter (energy was the other) and ended the period up 4.8%. It has the second highest dividend yield relative to other sectors in the index, according to Goldman Sachs. Among utility names on CNBC Pro’s screen, Japan’s largest gas retailer, Tokyo Gas, has the lowest historical beta. The stock is up 17.7% and has an 80% buy rating from analysts covering it. Analysts believe the stock is up 13.3% on average. “Beta” is a measure of a stock’s volatility. A beta of 1 means that the volatility of a stock is equal to that of the market; a beta below 1 means the stock is less volatile than the market. Read more Wall Street likes these defensive stocks, especially during a sell-off These low-volatility funds offer stability when the Dow swings 1,000 points Stay defensive with these global stocks amid market volatility, analysts say Other stocks utilities that appeared on the screen include Germany’s RWE, Spain’s Iberdrola, US energy company Public Service Enterprise and Ohio-based FirstEnergy. A number of financial stocks also appeared on the list. Japan Post has the lowest historical beta of this group and the highest upside potential of 18.8%, according to FactSet. The remaining financial stocks are all insurers, including Canada’s Intact Financial, Australia’s Suncorp, Japan’s MS&AD and Denmark’s Tryg. Only one health care stock, French pharmaceutical giant Sanofi, made the list. The stock is up 12.9% this year, but analysts see an additional 14% average rise. Illinois-based biopharmaceutical firm Abbvie, with a historical beta of 0.8, almost came through, with analysts putting the stock up 9.2% on average. Biopharmaceutical stocks have traditionally been viewed as defensive bets in a volatile market. The large-cap biopharmaceutical industry specifically outperforms the S&P 500 during a recession, according to Wells Fargo analyst Mohit Bansal. Several consumer staples also appeared on the CNBC Pro screen, including British American Tobacco and Reckitt Benckiser. Coca-Cola, which has a historical beta of 0.6, narrowly missed the cut with 9.2% upside potential. Analysts like consumer staples for their ability to retain market share and beat the market during periods of rising prices and even recessions. Toyota Motor was the only automaker on display. The stock has a historical beta of 0.8 and has gained nearly 6% this year. Analysts covering the stock see more upside ahead, with an average upside of 12.2%.
A Nasdaq market maker works on the Nasdaq Market site in New York on May 2, 2019.
Brendan McDermid | Reuters
From a massive stock market rally to a spectacular crash in the space of just two trading days, market turbulence defines today’s markets. As investors seek refuge, CNBC identifies buy-rated global stocks that have a track record of stability.
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