Six 'Safe' Stocks to Buy Now
Stocks continued sliding Friday on a weak factory order report, following Thursday's shaky start for the first day of the third quarter.
Investors fearful of continuing volatility are searching for safe investments.
David Kovacs, chief investment officer of quantitative strategies at Turner Investment Partners, and Matt Shapiro, president of MWS Capital, shared different approaches for navigating difficult markets. Together they offer six of the safest stocks to buy now.
Kovacs favors utilities, namely Progress Energy, a southeastern US utility paying a dividend of more than 6 percent. "That's a company that has a lower sensitivity to a decline in economy activity," Kovacs said. "Typically utilities do well in this environment."
Kovacs also likes companies in businesses that are unlikely to be affected by the lackluster economy and troubles in Europe. These include Flir Systems , which makes satellite imaging systems likely to be used by the U.S. Defense Department, and Hospira , which makes injectable delivery systems for generic drugs. Hospira "could be a buyout candidate," Kovacs said.
Shapiro believes investors will be better off in top-tier blue chip stocks, including:
- Procter & Gamble ,
- Intel and
- Johnson & Johnson .
"When you think about safety you need big profits, big dividends and big companies," Shapiro said. "All of these companies, as well, have credit that's better than most of these small European countries. So for me that's very important and that provides a lot of safety."
Shapiro likes that P&G, Intel and Johnson & Johnson all pay dividends of more than 3%, and he isn't concerned about investors getting hit with higher tax bills on their dividends.
"Do you hide in a 10-year Treasury to get about 2.90 (2.9%) or do you invest in the economy and get more in broad-based companies with over $10 billion in profits," Shapiro said.
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Disclosure information was not available for David Kovacs and Matt Shapiro or their companies.