These stable stocks are staying above water and generating income in this volatile year
Posted On August 23, 2022
As investors reconsider the endurance of the summer rally, they could find some comfort in low volatility stocks that are generating income. The Dow Jones Industrial Average fell more than 600 points Monday, while the S & P 500 lost more than 2%. Those were their biggest one-day drops since falling to their lows on June 16. Stocks had been on a tear since mid-June, giving some investors hope that the worst of this bad year may be over. Others have said the bounce was temporary and the market is bound to turn lower again by year-end. There are still a handful of stocks investors can turn to for shelter, however. Using FactSet data, CNBC Pro screened for names that are higher for the year and have a three-year beta of less than 1, meaning they tend to be less volatile than the broader market; have dividend yields above 3%, meaning they generate income greater than the 10-year Treasury note; and have free cash flow yield above 5%, showing the companies have some financial stability. Here are the stocks that met these criteria: Energy infrastructure firm Kinder Morgan and the food manufacturer Kellogg have shown the highest year-to-date returns in 2022, with both up 17% after Monday’s close. Kinder has a three-year beta of 0.9 and the highest dividend and free cash flow yield. Kellogg has the lowest, but it also has the lowest beta of any name on the list at 0.3. Kraft Heinz and Philip Morris also made the list. Kraft has high free cash flow yield, of 10.2% and has gained 7% this year. Cigarette maker Philip Morris has one of the higher dividend yields of the group at 5.1%. It’s up 3.5% for the year. AbbVie is the lone heath care stock on the list. It’s up just over 3% for the year along with packaging firm Amcor . Tech giant IBM is the laggard of the list in terms of year-to-date performance, having gained only 1.4%.