Wall Street witnessed one of the worst days in months on Monday, with stocks tumbling on fears of a recession as uncertainty grew over President Donald Trump’s tariff policies. Even Trump didn’t rule out the chances of the economy slipping into a recession owing to his tariffs.
Given the uncertainties surrounding the economy and a sudden rise in inflation over the past few months, it is likely that markets will stay volatile for a longer period.
It would thus be wise and safe to invest in defensive stocks such as consumer staples and utilities. In this regard, Molson Coors Beverage Company TAP, Carriage Services, Inc. CSV, American Water Works Company, Inc. AWK and CenterPoint Energy, Inc. CNP are lucrative buys. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Moreover, the stocks are from the low-beta category (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.
On Monday, the Dow fell 890.01 points or 2.1%, while the S&P 500 slid 2.7%, touching its lowest level since September at one point before recovering ahead of close. The Nasdaq was the worst hit, shedding 727.90 points or 4%, to close at its lowest level since September.
Trump’s tariff policies have ignited fears of a global trade war, with the already-weakening economy slipping into a recession. Even Trump, over the weekend, didn’t rule out the possibility of a recession as a result of his tariff policies.
The President slapped 10% tariffs on Chinese goods. He announced 25% tariffs on Canadian and Mexican imports before pausing them briefly for a month. Trump has also threatened to impose hefty tariffs on the European Union. Meanwhile, all the impacted trading partners have announced retaliatory means.
Volatility returned to Wall Street in early February initially triggered by some soft economic data that also showed inflation showing no signs of cooling. The Federal Reserve has already adopted a cautious approach and left interest rates unchanged in its January policy meeting. It hinted at not going for a cut until lawmakers are confident about inflation easing.
The tariff war has further fueled the fears, aggravating the volatility. On Wednesday, investors dumped the high-flying tech stocks that have largely been responsible for the market rally in 2023 and 2024.
Investors turned to safe-haven defensive stocks as they are now anticipating that the volatility will continue for a longer period.
Molson Coors Beverage Company, the global manufacturer and seller of beer and other beverage products, has an impressive diverse portfolio of owned and partner brands. TAP’s brands include global priority brands such as Blue Moon, Miller Lite, CoorsBanquet, Coors Light, Miller Genuine Draft and Staropramen, as well as regional champion brands like Carling and Molson Canadian.
Molson Coors Beverage Company’s expected earnings growth rate for the current year is 6.5%. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the past 60 days. TAP presently sports a Zacks Rank #1. Molson Coors has a beta of 0.81 and a current dividend yield of 3.04%.
Carriage Services, Inc. is a leading provider of death care services and products in the United States. CSV provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.
Carriage Services has an expected earnings growth rate of 21.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the past 60 days. CSV presently sports a Zacks Rank #1. Carriage Services has a beta of 0.91 and a current dividend yield of 1.17%.
American Water Works Company, Inc. provides essential water services to over 14 million customers in 24 states and has an employee strength of 6,500. AWK also acquires small water service providers to expand its customer base.
American Water Works Company has an expected earnings growth rate of 5.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last 60 days. AWK presently carries a Zacks Rank #2. American Water Works has a beta of 0.69 and a current dividend yield of 2.10%.
CenterPoint Energy, Inc. is a domestic energy delivery company that provides electric transmission & distribution, natural gas distribution and competitive natural gas sales and services operations. CNP maintains the wires, poles and electric infrastructure serving more than 2.5 million metered customers in the greater Houston area and in southwestern Indiana.
CenterPoint Energy has an expected earnings growth rate of 8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. CNP currently has a Zacks Rank #2. CenterPoint Energy has a beta of 0.91 and a current dividend yield of 2.57%.
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CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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