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Buy These 3 Low-Beta Stocks to Navigate Volatility

Stocks have faced pressure over the last several weeks, with continued uncertainty surrounding the economy weighing on investors' minds.

During times of weakness, considering low-beta stocks can be a solid choice, as they’re less susceptible to the general market’s overall movements.

And for those interested in taming volatility, three top-ranked stocks – DaVita DVA, Walmart WMT, and Aflac AFL – could all be considerations.

All three stocks sport a favorable Zacks Rank, reside within the top 25% of all Zacks Industries, and have consistently posted better-than-expected results as of late. Let’s take a closer look at each.

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DaVita

DaVita is a leading provider of dialysis services in the U.S. to patients suffering from chronic kidney failure, also known as end-stage renal disease (ESRD). The stock is currently a Zacks Rank #1 (Strong Buy), with expectations creeping higher across the board.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company sports a solid growth profile, with earnings forecasted to climb 10% on 2% higher revenues in its current year. Peeking ahead, estimates for FY24 allude to a further 6% earnings boost paired with a 2.5% sales bump.

And DaVita plans to extend its footprint, providing further runways for growth. The company has been steadily expanding in international markets and expects to expand in major European and Asian countries through acquisitions and partnerships.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company posted a big beat in its latest release, exceeding the Zacks Consensus EPS Estimate by more than 25% and delivering a 2% sales surprise. In fact, the company has beaten consensus EPS expectations by an average of 21% across its last four releases.

Walmart

Many are familiar with the titan Walmart, with its product portfolio covering nearly every aspect of retail and being known for relatively low prices. Analysts have taken their earnings expectations higher across all timeframes, landing the stock into a Zacks Rank #2 (Buy).

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Zacks Investment Research


Image Source: Zacks Investment Research

Income-focused investors could be attracted to WMT shares, currently yielding a respectable 1.4% annually. And the company has shown a nice commitment to increasingly rewarding shareholders, with the payout growing a modest 2% annually over the last five years.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company recently upped its FY24 guidance following robust quarterly results, with strong sales growth and continued business momentum providing solid tailwinds.

Aflac

Aflac, a current Zacks Rank #1 (Strong Buy), is an American insurance company and a massive supplier of supplemental insurance within the U.S. The company has seen modest positive earnings estimate revisions among all timeframes.

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Zacks Investment Research


Image Source: Zacks Investment Research

Like DVA, Aflac has consistently posted bottom line results above expectations, exceeding the Zacks Consensus EPS Estimate by an average of 8% across its last four releases. Just in its latest print, Aflac posted an 11% EPS beat and reported sales nearly 15% above the consensus.

In addition, the company is a member of the elite Dividend Aristocrats group, reflecting its commitment to shareholders through a minimum of 25+ years of increased payouts. AFL shares currently yield a solid 2.2%, with a payout ratio sitting sustainably at 30% of its earnings.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

And shares aren’t valuation stretched given its forecasted growth, with earnings forecasted to climb 13% in its current year. Shares presently trade at a 12.8X forward earnings multiple, a few ticks above the five-year median but nicely below highs of 13.8X in 2022.

Bottom Line

Adding low-beta stocks can be a great way to counter volatility, as these stocks are less sensitive to the market’s overall movements. And with volatility creeping higher as of late, investors could be looking for a shield.

For those interested in a more conservative approach, all three low-beta stocks above – DaVita DVA, Walmart WMT, and Aflac AFL – could be solid considerations.

All three sport a favorable Zacks Rank, reflecting optimism among analysts.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Walmart Inc. (WMT) : Free Stock Analysis Report

DaVita Inc. (DVA) : Free Stock Analysis Report

Aflac Incorporated (AFL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research