Safe haven investments are a great way to lower risk over the long haul. Companies with consistent revenue and earnings tend to be more stable and help significantly lower risk during volatile market conditions. They are a great way to diversify your portfolio and protect your investments during market turbulence. You can find safe havens by looking for companies with a history of consistent growth, strong financials, and a history of paying dividends.
Given the current market conditions, investors must carefully monitor their exposure to risk and make sure that their portfolios are diversified. The stock market has taken a hammering this year, and several high-value stocks have plunged to record lows. Many safe havens are now trading at reasonable valuations and can allow investors to marginalize their risk in the current downturn. With that said, let’s look at seven safe havens you should gain exposure to in the current market downturn.
Johnson & Johnson
Sociedad Quimica Y Minera
Marcus & Millichap
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Some stocks are more reliable than others, and few companies are more reliable than Coca-Cola (NYSE:KO). Its products are in demand regardless of season or economic conditions. Hence, it’s ideal for those looking for more stability in their portfolio. And while its share price may not always rise rapidly, it is unlikely to drop dramatically either.
Perhaps its greatest strength is its pricing power, which is especially relevant in the current inflationary environment. Moreover, the firm has a fortress of a balance sheet, with more than $10 billion in its cash till. The diversity of its product offerings has helped its revenue and earnings growth, reducing dependency on its flagship carbonated beverages. More importantly, it’s a dividend king for investors, having increased its payout for the last 59 consecutive years.
JPMorgan Chase (JPM)
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JPMorgan Chase (NYSE:JPM) is the largest bank in the world, and its third-quarter earnings report demonstrates the company’s strength. JPMorgan reports that consumers and businesses are holding up remarkably well despite the challenges. This is good news for investors, as the current market downturn is unlikely to impact the bank’s stellar dividend profile. It yields nearly 3%, which should keep them ahead of long-term inflation.
JPM boasts a wide moat built from technical efficiency, effective capital expenditure management, and cost advantages. It maintains an integrated set of financial franchises that operate powerful product lines providing massive scope and scale for the business. Moreover, the firm is poised to benefit from rising interest rates, making it a sound investment in the financial space. JPM stock is well-positioned to weather any challenges that may arise in the future.
Johnson & Johnson (JNJ)
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Johnson & Johnson (NYSE:JNJ) is the world’s largest pharma business offering investors a growing dividend and healthy incremental upside. Its company has grown its top line by single-digit margins over the past several years, making it one of the most stable businesses in its niche. Sales of its coronavirus vaccine and related products brought in a ton of money for the firm, positioning it incredibly well for the future.
In ushering in the next era of growth for the business, JNJ is focused on picking up other pharma companies. Moreover, it’s focused on spinning off its consumer business and growing sales from its pharmaceutical division to a spectacular $60 billion by 2025. Given its track record in the past, I would bet on JNJ to continue growing its business at a healthy pace for the foreseeable future. Also, the stock yields a robust 2.75% dividend yield, which makes it a stellar investment in the space.
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Apple (NASDAQ:AAPL) sits at the Mount Rushmore of tech companies, with a market cap of over $2.2 trillion. With iconic products like the iPhone, iPad, and MacBook, Apple has cemented itself as a leader in the tech industry. Thanks to its innovative products, strong brand loyalty, and incredible marketing efforts, there’s no doubt that Apple remains the pick of the tech stocks at this time.
While its competitors have faltered in the current economic environment, the tech giant continues to post extraordinary results. It generated a record $90.1 billion in sales last quarter, with iPhone sales jumping almost 10% year-over-year. Hence, AAPL is an ideal choice for investors for its stability in an otherwise volatile market. Also, it offers a dividend of 23 cents which its management continues to grow at a healthy pace each year. With multiple growth catalysts in motion in fintech, streaming, advertising, and whatnot, AAPL stock is a no-brainer investment.
Kraft Heinz (KHC)
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Kraft Heinz (NASDAQ:KHC) is an ideal investment for those looking for safe consumer staples stocks. The company owns several recognizable brands, including HP Brands, Jell-O, Oscar Mayer, and others. These brands have strong pricing power, which enables Kraft Heinz to continue growing its dividend even in tough economic times. In addition, the company has a history of conservative financial management, which has helped it weather periods of market turmoil.
Though it faces substantial headwinds, its business has proven to be remarkably resilient, exhibiting strong pricing power. Moreover, its EBITDA and net income margins are at a stellar 19.1% and 4.7% for the trailing-twelve months. Hence, Kraft Heinz is an attractive investment for risk-averse investors seeking exposure to the consumer staples sector.
Sociedad Quimica Y Minera (SQM)
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Sociedad Quimica Y Minera (NYSE:SQM) is a Chilean mining giant involved in producing potassium, lithium, and other chemicals and minerals. Its lithium segment, in particular, has witnessed robust demand on the back of the rampant growth in the electric vehicles industry. The low-cost producer has increased its output at a superb pace to position itself as a juggernaut in the space. Also, it offers a generous 6.6% dividend yield to investors.
2022 has been an incredible year for the business, where lithium prices have risen rapidly to new heights. Consequently, SQM and its peers have posted record earnings in recent quarters. SQM recently posted its third quarter results, where its sales increased by a whopping 347.4% from the prior-year period. Moreover, net income for the nine months that ended in September shot up by 944%. Hence, the firm is in a pole position to benefit from the strength in the lithium market for years to come.
Marcus & Millichap (MMI)
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Marcus & Millichap (NYSE:MMI) is a leading real estate and mortgage brokerage firm that has witnessed tremendous growth in the last five years. It operates a profitable enterprise, and its robust competitive positioning has helped improve its financial metrics across the board. The firm is a trusted partner for multiple high-value clients, positioned for continued growth and success.
The company derives the bulk of its sales from real estate brokerage commissions. Moreover, it has four main segments based on property values, the most popular of which has been its private client segment. The segment covers properties priced between $1 million and $10 million, with remarkably high asset turnover rates.
Furthermore, the firm has an effective shareholder rewards program. It recently announced plans to buy back shares up to $70 million in value.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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