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7 Safe Stocks to Buy and Hold Forever

In October and November, I suggested safe stocks to buy and hold. I’m pleased to say that those stocks have increased by an average of around 21% since the beginning of October. Those lists focused heavily on dividend stocks. And I still believe that now is a good time to invest in companies that are among the best in their respective sectors.

For my third attempt at picking safe stocks to buy and hold., however, I’m offering investors a different strategy for finding safe stocks. That strategy involves considering stocks that have a low beta value.

Beta is a metric that investors use to compare the volatility of a stock in comparison to the overall market. Stocks with a low beta value (less than 1 but higher than 0) are generally safer when the market is down because these companies usually sell essential products and services . Consequently,  their revenue and earnings are predictable.

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Of course, it’s also important to take a look under the hood to see how these companies are run and if they are well-positioned to grow. As of the market close on November 30, 2022, these seven stocks had risen by an average of 26%. over the previous two months That makes them solid choices and safe stocks to buy and hold as we head into 2023.

TMUS

T-Mobile

$152.41

SMP

Standard Motor Products

$38.76

RCI

Rogers Communications

$46.22

GRC

Gorman-Rupp

$27.32

GWRS

Global Water

$12.66

ADUS

Addus HomeCare

$112.55

AEM

Agnico Eagle Mines

$51.77

T-Mobile (TMUS)

Source: Shutterstock

T-Mobile (NASDAQ:TMUS)has all the characteristic of a low-beta stock. Wireless products, which is the company’s specialty,  are an essential part of our lives. And since TMUS’s acquisition of Sprint, T-Mobile stands to capture a larger share of that pie. That may be one reason that TMUS stock caught the eye of Warren Buffett.

I have found  another reason that TMUS  should be included on this list of safe stocks to buy and hold. Specifically, government spending continues to boost the economy. For example, Washington is spending $100 billion to increase the penetration of broadband internet services in the U.S. As the nation’s second largest wireless carrier, T-Mobile is working with Citigroup (NYSE:C) to find entities willing to partner on the creation of a fiber-optic network for the home-broadband market.

T-Mobile has a low beta of 0.54, and TMUS stock is up over 30% in 2022. The stock’s price-earnings ratio is not cheap. However, even though T-Mobile is trading near the top of its 52-week range, analysts’ average price target on the name is 15% above the stock’s current level.

Standard Motor Products (SMP)

An angled side view of a row of parked cars.
An angled side view of a row of parked cars.

Source: lumen-digital / Shutterstock.com

Standard Motor Products (NYSE:SMP) operates in the aftermarket auto repair industry. Government data indicated that new car sales jumped sharply in November. That would seem to be negative for the companies that rely on selling parts which are used to repair automobiles.

But if history is any indicator, the auto-parts sector always thrives. And data shows that nearly 95% of the vehicles purchased in the U.S. are conventional, gas-powered automobiles. Therefore, most of the consumers who have recently purchased a new vehicle will not own electric vehicles (EV)  anytime soon. Since EVs tend to have many fewer parts than gas-powered ones, EVs seem to be a larger, long-term threat to auto-parts companies than a bump in the sales of new vehicle.

The auto-parts sector is crowded, but SMP looks like an attractive option. Its revenue and earnings are growing steadily, in-line with expectations. And although the stock is down 26% in 2022, it has climbed nearly 4% in the last three months.

That suggests that investors may be seeing some value in a stock whose beta value is 0.51. Plus, SMP stock has a 2.81% dividend yield. That yield is above the sector’s average.

Rogers Communications (RCI)

The logo for Rogers Communications displayed on an office building.
The logo for Rogers Communications displayed on an office building.

Source: JHVEPhoto / Shutterstock.com

One attribute you should look for in safe stocks to buy and hold is the ability to command market share.  The market share of Rogers Communications (NYSE:RCI) is high. But the Canadian-based telecommunications company did get punished after it suffered an embarrassing outage this summer.

However, the company is making significant investments to ensure that such an outage won’t occur in the future. And as one of Canada’s “big three”  telecom companies, it’s not in danger of losing market share. In the meantime, the company’s revenue and earnings have remained stable despite it paying out approximately $150 million to compensate its customers for its approximately five days of lost service.

RCI stock has a beta of 0.5, and it appears to provide  investors with a good value at its current price. The stock is down 3% in 2022, but it’s up 8.6% in the last three months. Analysts’ average price target on RCI is 15% above the stock’s current level. Plus, investors get an attractive dividend that currently has a yield of 3.2%.

Gorman-Rupp (GRC)

a picture of water
a picture of water

Source: Shutterstock

Gorman-Rupp (NYSE:GRC) is one of those “boring” companies that manufactures essential products. Specifically, Gorman-Rupp makes pumps and pumping systems that are critical for water utilities.

Although the company does most of its business in the United States, it is generating about one-third of its revenue from outside America. The company operates more than 1 million square feet of factories and has five distribution centers around the world.

In its most recent, reported quarter, Gorman-Rupp’s revenue climbed 52% year-over-year to $153.8 million. And it also increased its dividend. As a result, it’s now in the exclusive group of stocks known as “dividend kings.” Those “kings” have increased their dividends for at least 50 consecutive years.

GRC stock has a beta of 0.73 and is currently trading near the low end of its 52-week range. That sets investors up for a nice gain. That’s also the opinion of analysts whose average price target is 66% above the name’s current level.

Global Water Resources (GWRS)

A zoomed in photo of a drop of water hitting a container of water's surface.
A zoomed in photo of a drop of water hitting a container of water's surface.

Source: Sambulov Yevgeniy/ShutterStock.com

Water crises are emerging throughout the world and right here in the United States. In fact, several Western states are dealing with a multi-year drought. And that brings me to Global Water Resources (NASDAQ:GWRS).

Global Water is based in Arizona. As Ian Bezek, another InvestorPlace columnist, noted, the company has been on an acquisition spree, buying up approximately half a dozen smaller water utilities that were serving only a handful of towns and communities.

Those acquisitions are enabling the company’s top and bottom lines to grow on a year-over-year basis. But that’s not reflected in the GWRS stock price, which is down 26% for the year.

The decline may have been caused by the company’s price-earnings ratio, which is over 57. That’s high even for a sector that has a higher-than-average P/E ratio of over 30. But with a beta of 0.73 and trading 66% below analysts’ average price target, the stock may provide conservative investors with a good opportunity.

Addus HomeCare (ADUS)

colorful pills and vials sitting on a table representing VTGN stock
colorful pills and vials sitting on a table representing VTGN stock

Source: Bukhta Yurii / Shutterstock.com

Small-cap stocks don’t appeal to all investors. However, for investors who have room in their portfolios for some speculative, small-cap stocks, Addus HomeCare (NASDAQ:ADUS) is an interesting, low-beta name to consider.

ADUS should be able to capitalize on the aging of America. The demand for long-term care, including everything from basic nutrition services to palliative care. will increase.

But a good story is not enough to make investors consider a stock. So importantly, Addus HomeCare’s  revenue has increased  for four consecutive quarters, both versus the previous quarters and year-over-year.

ADUS stock is up nearly 33% in the last year. And it has gained an impressive 270% in the last five years. With a beta of 0.77, ADUS is about as stable as any investment you can make.

Agnico Eagle Mines (AEM)

An image of multiple gold bars
An image of multiple gold bars

Source: Shutterstock

Gold prices have begun to climb as short-term Treasury yields are rising. That signals that the demand for gold and silver may be increasing. Agnico mines gold and silver. It also produces copper which will be needed in a number of emerging industries, including electric vehicles.

The company also has strong fundamentals., as its return on assets is over 2%.While that may not sound impressive, the average mining stock has a negative return on asset. Also, Agnico has a significantly higher profit margin than other mining stocks.

AEM stock is down 5% for the year, but it’s up 25% in the last three months. Since the demand for precious metals appears to be growing, now looks like a good time to jump on this stock, which has a beta of 0.76.

On the date of publication, Chris Markoch 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. 

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.

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