Value investors aren’t into drama when it comes to investing. Slow, steady pedestrian stocks from companies that are turning a profit are especially important now as markets are more turbulent and the world is more uncertain.
The highs and (very) lows of funds such as Catherine Wood (Trades, Portfolio)'s Ark Invest (ARKK, Financial) aren’t what value investors are looking for. Instead, we model our strategies on the philosophy of Warren Buffett (Trades, Portfolio). Value investors are more than happy to invest in companies that are proven winners. With some of these boring stocks and a buy-and-hold strategy, we may only need to monitor and rebalance our portfolios twice a year or less.
This makes investing easier and less grating on your nerves. If you’re the kind of investor who wants to see boring stocks that have a high chance to produce steady growth over time, here are six of my favorite picks for turbulent times.
Lowe’s
Home repair and renovation supplies aren’t sexy unless you’re a homeowner - or a Lowe's (LOW, Financial) stockholder. Lowe's is down from its pandemic lockdown highs, but Wall Street analysts still rate it a stock to buy and hold. The company is forecasted to reach a 13% operating margin this year, and a hot real estate market is helping boost profits. So far this year, earnigns per share is on target, and its price-earnings ratio is low at 16.97.
UnitedHealth Group
One of the things people will continue to spend money on during an economic downturn is health care. One boring health care stock is UnitedHealth Group (UN, which receives a buy rating on Wall Street. UnitedHealth Group's price-earnings ratio of 29.52 is a little high, but it has a dividend yield of 1.09%. With UnitedHealth’s conservative management, I believe the health insurance giant is poised to weather any storms going forward.
Duke Energy
Natural gas and energy company Duke Energy (DUK, Financial) makes this list of boring value stocks because energy is another difficult area to cut out of a budget. Duke has a dividend yield of 3.40%, making it attractive if passive income is part of your portfolio plan. Duke hasn’t had wild swings in it stock price, and it is trading below its 52-week high. That and rising fuel prices could make Duke a bargain right now.
Moody’s
What could be more boring than a company that provides analytics and credit ratings? Moody’s (MCO, Financial) provides both, but it's rated as a buy-and-hold stock on Wall Street, and it's trading below its 52-week high. Those bullish on Moody's say the company will benefit from increases in financial regulation and that Moody’s Analytics will be a growth area for the company. I think this is likely to be a stock you can set and forget.
The Mosaic Company
The Mosaic Company (MOS, Financial) is a producer of potash and phosphates for agricultural use. Another stock rated for buying and holding by Wall Street, Mosaic's stock may rise with fertilizer prices as agriculture becomes more difficult due to topsoil depletion and climate change. Its price-earnings ratio of 17.66 is low, and Mosaic is trading below its 52-week high.
Conagra Brands
During turbulent times, food stocks can be long-term beneficiaries. After all, consumers are still going to want to buy their favorite foods. This means Conagra Brands (CAG, Financial) may be a value opportunity right now, since it is trading several dollars under its highs of the past year and has a dividend yield of 3.56%.
Conagra still faces inflationary pressures. Its cost of revenue is up 9.85%, and it has a profit margin of just over 7%. It has the same $9 billion or so of debt as in 2021. However, its brands, such as Duncan Hines, Hunt’s, Bertolli and Healthy Choice, are favorites with shoppers. Chances are, Conagra won’t have huge rises in its share price, but it is a profitable company that can likely stand up to the test of inflation.
