Investor confidence has taken a hit this week as rising Treasury yields weigh on the market. Over the past three days, the S&P 500 index has seen its longest decline since early September, reflecting growing uncertainty. Meanwhile, the 10-year US Treasury yield jumped 14 basis points in just a few sessions, bringing the total rise for October to 46 basis points.

The combination of higher yields, muted expectations for future Federal Reserve rate cuts, geopolitical tensions and an upcoming U.S. election has kept the market on edge. With volatility increasing, we seek refuge in low-risk, low-beta stocks such as Walmart Inc. (WMT), Philip Morris International Inc. (PM) and the Colgate-Palmolive company (CL) could be a wise decision for investors.

In September, the Federal Reserve launched its long-awaited rate cutsmarking the start of what is expected to be a gradual easing of interest rates through 2025. While some were surprised by the 50 basis point cut, others saw it as a necessary step to maintain the economic balance. However, recent market turmoil suggests that concerns about the economy have not gone away.

Volatility returned in October, fueled by new concerns about the economy. Investors were shaken by the latest inflation report, which showed prices rising in September after months of decline. The Consumer Price Index (CPI) increased by 0.2% for the month, slightly above expectations. That has reignited fears of a recession and raised doubts about the pace of future rate cuts.

As a result, consumer confidence has plummeted. The latest survey from the University of Michigan showed that this feeling fell to 68.9 in Octoberdown from 70.1 in September.

In times like these, low beta stocks can be a good option for investors looking for stability. These stocks tend to be less volatile than the broader market, making them safer bets when uncertainty is high. Their consistent performance and reliable return potential make them attractive safe havens in times of market turbulence.

With this in mind, let’s discuss the fundamentals of the stocks mentioned above in detail:

Walmart Inc. (WMT)

Retail giant WMT operates supercenters, supermarkets, hypermarkets, warehouse clubs, retail stores, discount stores, members-only warehouse clubs and e-commerce websites, including walmart.com and Walmart.com.mx flipkart.com, among others. The Company operates through three segments: Walmart US; Walmart International; and Sam’s Club.

In February 2024, the company raised its dividend by 9% year over year to $0.83 per share post-split ($2.49 per share pre-split), underscoring its commitment to rewarding shareholders.

WMT’s four-year average dividend yield is 1.48%, while its annual dividend translates to a 1% yield at current prices. Its dividend has grown at a CAGR of 3.6% over the past three years and 2.9% over the past five years. Additionally, this increase marks the company’s 51st consecutive year of dividend growth.

For the fiscal second quarter ended June 30, 2024, WMT’s total revenue increased 4.8% year over year to $169.34 billion, driven by a 21% increase in sales global e-commerce companies. Its adjusted operating profit increased 7.2% from last year to $7.94 billion, while its adjusted EPS came in at $0.67, up 9.8 % over one year. Additionally, the company’s attributable net profit for the period was $4.50 billion.

Street expects WMT’s third-quarter revenue (ending October 2024) to rise 4.3% year-over-year to $166.23 billion. Its EPS for the current quarter is expected to increase 3.4% from the year-ago period to $0.53. Additionally, the company has beaten revenue and EPS estimates in each of the last four quarters, which is promising.

WMT shares have gained 54.2% over the past nine months to close the most recent trading session at $82.51. Its five-year monthly beta of 0.52 indicates relative stability compared to the market as a whole.

WMT POWR Ratings reflect this robust outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. POWR Ratings evaluate stocks based on 118 different factors, each with its own weighting.

It also has an A grade for stability and a B for growth, momentum, and sentiment. Among the 37 A-rated stocks Grocery/Big Box Retailers industry, it is ranked No. 8. Click here to see WMT’s rating for value and quality.

Philip Morris International Inc. (PM)

PM is a tobacco company focused on creating a smoke-free future and evolving its long-term portfolio to include products outside of the tobacco and nicotine sectors. The Company’s product portfolio includes cigarettes and smokeless products, such as heatless, vapor and oral nicotine products.

On September 12, PM’s board of directors increased the company’s regular quarterly dividend by 3.8%, bringing it to an annualized rate of $5.40 per share. It paid a quarterly dividend of $1.35 per share, up from $1.30 per share, to its shareholders on October 10, 2024.

With 15 consecutive years of dividend growth, the company’s annual dividend translates to a yield of 4.07% on the current stock price. Its average return over four years is 5.21%. PM’s dividend payout has grown at a CAGR of 2.7% over the past three years.

PM’s net revenue increased 8.4% year over year to $9.91 billion for the third quarter ended September 30, 2024. Its adjusted operating profit increased by 11.2% from last year’s value to $4.15 billion, while its attributable net profit stood at $3.08. billion, which represents an increase of 50% compared to the previous year’s quarter.

Additionally, the company’s adjusted EPS increased 14.4% year-over-year to $1.91. Additionally, its cash and cash equivalents stood at $4.26 billion, an increase of 39.2% from $3.06 billion as of December 31, 2023.

The consensus EPS estimate of $1.52 for the fiscal fourth quarter (ending December 2024) represents an 11.9% year-over-year improvement. The consensus revenue estimate of $9.56 billion for the current quarter represents an increase of 5.7% from last year. The company has an impressive history of surprises; it has topped consensus revenue estimates in each of the last four quarters.

Over the past year, the stock has gained 42.9%, closing the last trading session at $129.86. It has a beta of 0.58.

PM’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.

It has a B rating for stability, feeling and quality. Out of nine B-rated stocks Tobacco industry, it is ranked #3. Click here to see other PM ratings for Growth, Value and Momentum.

Colgate-Palmolive Company (CL)

CL manufactures and sells consumer products internationally. The Company operates through two segments: oral, personal and home care; and animal nutrition. It offers products such as toothpaste, toothbrushes, mouthwashes, bar and liquid hand soaps, shower gels, shampoos, conditioners, deodorants and antiperspirants.

On September 12, CL’s board of directors declared a quarterly dividend of $0.50 per common share, payable on November 15, 2024 to shareholders of record on October 18, 2024.

CL pays an annual dividend of $2, which translates to a yield of 2.01% at the current stock price. Its four-year average dividend yield is 2.30%. Additionally, the company’s dividend payouts have grown at a CAGR of 3.4% over the past three years. CL has increased its dividends for 61 consecutive years.

During the third quarter ended September 30, 2024, CL’s net sales increased 2.4% year-over-year to $5.03 billion. Its non-GAAP operating profit increased 4.8% from the corresponding quarter last year to $1.08 billion. Non-GAAP net income attributable to CL was $750 million, or $0.91 per share, up 5.6% and 5.8% from the prior-year quarter, respectively. .

Analysts expect CL’s revenue and EPS for the fourth quarter (ended December 2024) to increase 2.1% and 5% year-over-year to 5.06 billion dollars and $0.91, respectively. The company has beaten consensus estimates for revenue and EPS over the past four quarters.

CL shares have surged 31.3% over the past year and 19.9% ​​year-to-date to close the most recent trading session at $95.61. It has a beta of 0.40.

CL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

CL has an A rating for quality and a B rating for stability and feeling. It is ranked 15th out of 58 titles in category B. Consumer goods industry.

In addition to the POWR Ratings we listed above, we also have CL Ratings for Growth, Value, and Momentum. You can get all CL grades here.

What to do next?

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WMT Stock. Year to date, WMT has gained 58.54%, compared to a 22.97% rise in the benchmark S&P 500 during the same period.

About the Author: Shweta Kumari

Shweta’s deep interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make informed investment decisions. More…

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