Despite the gloomy outlook for the stock market in March, there are still a few "fortress" stocks that can help investors play defense and beat the market.
There is a strong likelihood that all the major indexes will have a losing month in February. At the time of Monday's close, the Dow Jones Industrial Average was down 3.5% for the month as of the close on Monday. The S&P 500 index is down 2.3% in February, while the Nasdaq Composite Index is down 1%, respectively. An increase in January's core personal consumption expenditures index, which was higher than expected, also fueled market concerns about the persistence of inflation, which sparked a broad market decline amid fears of persistent inflation.
There is a belief among many investors that the bear market is here to stay, and Morgan Stanley's chief U.S. equity strategist Mike Wilson said that March is a month when a resumption of the bear market could occur.
It was with this in mind, that Trade Algo screened for stocks that were strong enough to withstand market fluctuations and outperform them. According to the following list, stocks that have a beta of less than 1.0 are considered to have low volatility levels. As well as having a dividend yield of over 2% and earnings growth of more than 1% in 2023, they also have a dividend yield of more than 2%. Stocks must also be up more than 3.7% year to date in order to beat the market.
Cincinnati Financial, M&T Bank, and U.S. Bancorp are just a few regional banks that have solid finances. Piper Sandler upgraded U.S. Bancorp from neutral to overweight, calling it “one of the strongest large regional stories in an uncertain environment.” With a current dividend yield of 4.0%, U.S. Bancorp's earnings in 2023 are forecast to grow by almost 35%. Despite the fact that shares have gained more than 9% in 2023, the stock has fallen 15% in the past 12 months after gaining more than 9% in 2023.
It is also worth mentioning that the power company Edison International has also made the list, with a dividend yield of 4.3%. Analysts recommend buying Edison International shares, with 43.7% rating the stock as a buy.
Over the past 12 months, Edison's share price has also shown steady growth, with shares up 7% compared to a year ago. It is interesting to note that Garmin was the only tech company listed on the list, with its earnings per share expected to rise by 2.5%. According to FactSet, Garmin recently reported earnings for the fourth quarter that exceeded analysts' estimates for the period. The shares of the company have rallied by more than 6% in 2023, so far, but they have fallen by almost 11% over the past 12 months.
There's no doubt that the stock is mixed among the analysts, with only 28.5% of them rating the stock as a buy, and 71.4% rating it as a hold.
The real estate investment trust UDR has the highest 2023 expected per-share earnings growth of 95.4% out of all the companies on this list. This company's shares have fallen by 21% in the past year, but so far in the current year, the stock has risen about 12%.
There is also optimism among analysts who cover the stock, with half of them issuing a buy rating on it, and an average price target that has a 9.4% upside from the stock's Monday closing price over the next 12 months.
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