For investors looking to find a safe haven in a volatile market, there are a number of large cap stocks that could be attractive investments, especially in the healthcare sector. Stocks ended the week volatile for several trading sessions after Monday’s sharp global sell-off, nearly reversing the week’s losses. The three major U.S. indexes initially fell on weaker-than-expected U.S. employment data, concerns about the pace of Federal Reserve rate cuts, and the unwinding of the yen “carry trade.” CNBC Pro screened FactSet to find S&P 500 companies that could be reliable investments in this turbulent market. These stocks have seen lower price volatility over the past five years and have higher total returns, including stock price appreciation and dividends, than S&P 500 companies over the past five years. These stocks have also held up in the short term, making them attractively valued. Each stock has risen more than 5% over the past three months and trades at less than 21 times forward earnings, below the broad market index. Take a look at the following stocks: Healthcare companies Amgen, UnitedHealth Group and AbbVie are stocks that have seen low volatility and strong returns in recent years. Pharmaceutical company AbbVie has risen about 262% over the past five years, the highest among the stocks in this group. Its shares have risen 22.6% so far this year, with a three-month fluctuation of 18.7%. Morgan Stanley Wealth Management recently added AbbVie to its U.S. model portfolio. An August 1 note cited the company’s “recent strong momentum in immunology, which should effectively offset the decline in Humira sales and lead to strong EPS growth in the medium term” as the reason for the conference call. Second-quarter worldwide net sales of Humira, a treatment for severe rheumatoid arthritis, Crohn’s disease and ulcerative colitis, fell 29.8% from the same quarter in 2023 as competition from cheaper biosimilars continues to weigh on sales. But some patients are shifting to AbbVie’s immunotherapy drugs Skylysi and Rinvoq, company management said. Amgen shares have grown steadily with a five-year total return of 104%, but it’s still the slowest on the list. The stock is up nearly 12% this year. The company on Tuesday tightened its full-year profit outlook and announced that second-quarter profits missed expectations, citing rising operating expenses, including costs related to the development of its experimental obesity drug Maritide. Wells Fargo analyst Mohit Bansal downgraded Amgen shares to parity and set a price target of $335. That suggests just 3.2% upside potential, and he said analysts have already priced in the company’s Maritide success given its stellar performance over the past year. With a five-year price volatility ratio of 6.2 and a 152% gain over the past five years, T-Mobile is another stock with solid short-term returns. The stock has risen more than 21% so far this year, significantly outperforming the overall market return this year. According to earnings released on July 31, the mobile network operator beat second-quarter sales and profit expectations and also raised its full-year customer growth forecast. Analysts at several firms, including TD Cowen and Barclays, raised their price targets for T-Mobile following the report. Barclays analyst Kannan Venkateshwar raised his price target by $20 to $200 and said the company continues to perform well operationally and its subscriber guidance is conservative. Other stocks with low volatility and attractive valuations include auto replacement parts retailer AutoZone and insurance company Aflac. –CNBC’s Christopher Hayes contributed to the report.
These low volatility stocks have performed well and command attractive valuations.
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