Although the federal government – along with a very big bank – helped get in front of yet another bank failure (the third this year), the underlying volatility naturally incentives targeting the best safe stocks for market crash list. Worryingly, the AP reported recently that the banking crisis isn’t over yet. It’s just a matter of how much pain we may incur.
If that’s the case, you don’t want to mess around with too many risk-on assets. Instead, you should consider recession-proof stocks to buy now. Thanks to their resilient profile or their business models’ emerging relevancies during rising troubles, these stout enterprises may fare better (perhaps even much better) than others. In addition, as circumstances become more ambiguous, investors may assign a premium toward wealth protection over outright wealth accumulation. Therefore, market participants may want to target the below safe haven stocks in volatile market.
| DLTR | Dollar Tree | $155.17 |
| KO | Coca-Cola | $63.39 |
| CL | Colgate-Palmolive | $80.64 |
| TJX | TJX Companies | $78.59 |
| NEE | NextEra Energy | $75.58 |
| KELYA | Kelly Services | $16.25 |
| MCY | Mercury General | $29.87 |
Dollar Tree (DLTR)
We’re just going to get right into it with the technical performance of Dollar Tree (NASDAQ:DLTR). On a year-to-date basis through May 5, DLTR gained nearly 11% of equity value. During the same period, the benchmark S&P 500 index gained a bit over 8%. That’s a conspicuous gap over the broad index, implying greater demand for discount retailers. Of course, that’s a mixed bag for the economy.
Nevertheless, for investors, DLTR easily ranks within the best safe stocks for market crash list. Financially, Dollar Tree doesn’t offer the sturdiest books, I must say. However, it gets the job done. For example, its Altman Z-Score comes in at 3.6, which slightly rides into the safe zone.
Operationally, Dollar Tree features a three-year revenue growth rate of 8.5%, above 69.47% of defensive retail players. Also, its trailing-year net margin impresses at a lofty 5.7%. Finally, Wall Street analysts peg DLTR as a consensus moderate buy. Their average price target is a modest $158.83, implying over 2% upside potential. Still, for recession-proof stocks to buy now, it’s difficult to ignore.
Coca-Cola (KO)
For much of this year, shares of Coca-Cola (NYSE:KO) fell into negative territory. However, in the past month, KO gained over 2% of equity value. Fundamentally, Coca-Cola should move higher as the trade-down effect takes hold. Basically, consumers may start trading down their caffeine addiction from pricey coffeeshops to soda cans at the grocery store.
Financially, KO doesn’t make for the most remarkable name within the best safe stocks for market crash list. However, it does enjoy high fiscal stability and low risk of bankruptcy, as evidenced by its Altman Z-Score of 4.33. Operationally, though, its three-year revenue growth rate of 4.6% is just above average for the non-alcoholic beverages industry.
However, Coca-Cola’s strength centers on consistent profitability. Presently, its trailing-year net margin stands at 22.69%, above 95.33% of its rivals. Thus, it’s a strong idea for the safe haven stocks in volatile market list. Lastly, analysts peg KO as a consensus strong buy. Their average price target hits $69.44, implying over 8% upside potential.
Colgate-Palmolive (CL)
As with Coca-Cola above, Colgate-Palmolive (NYSE:CL) fell into negative territory in the charts for much of this year. But in the trailing one-month period, CL gained over 7% of market value. Therefore, since the beginning of this year, CL poked its head above parity by nearly 2%. Fundamentally, investors should have confidence that this recovery will continue. Basically, no matter how bad the economy gets, everyone needs to brush their teeth.
Just from the perspective of common sense, CL should make the best safe stocks for market crash list. That said, the financials present somewhat of a mixed bag. Regarding stability, Colgate brings it in spades, according to the Altman Z-Score of 6.38. Operationally, though, the company’s three-year revenue growth rate is only 50.23%, just a bit above average for the consumer packaged goods industry.
Nevertheless, CL intrigues because the underlying enterprise commands consistent profitability. Also, its trailing-year net margin is 8.71%, above 76.25% of its peers. To close out, analysts peg CL a consensus moderate buy. Their average price target lands at $87.46, implying almost 9% upside potential.
TJX Companies (TJX)
On paper, TJX Companies (NYSE:TJX) doesn’t seem particularly encouraging because its shares slipped roughly 1% YTD. However, TJX attempts to rank within the best safe stocks for market crash list with its recent performance. Since March 13, TJX shot up nearly 7%. Fundamentally, as companies start normalizing their workplace environment (i.e. recalling workers), people will look to upgrade their wardrobe for cheap.
Naturally, TJX off-price department store business should be relevant for this endeavor. Thus, it ranks within the safe haven stocks in volatile market list. Financially, the company offers a decent canvas. First, TJX’s Altman Z-Score hits a credible 5.16, indicating stability and low bankruptcy risk. Operationally, its three-year revenue growth rate pings at 7.6%, above 65.36% of the competition.
On the bottom line, TJX enjoys consistent profitability (10 consecutive years of net income). Also, its net margin is 7%, above 76.26% of sector players. Turning to Wall Street, analysts peg TJX a unanimous strong buy. On average, their price target stands at $90.73, implying almost 16% upside potential. Thus, it’s one of the low-risk high-reward stocks to consider.
NextEra Energy (NEE)
Admittedly, shares of the American energy firm NextEra Energy (NYSE:NEE) don’t seem particularly helpful under the context of best safe stocks for market crash. Down nearly 10% for the year through the May 5 session, NEE will require patience. However, the company also commands enormous relevancies for its renewable infrastructure network. Plus, power companies tend to enjoy natural monopolies.
Over the past 365 days, NEE did return shareholders almost 7%; thus, it’s not a completely speculative idea. Now, like other regulated utilities, NextEra doesn’t command the greatest financial stats if we’re being honest. For instance, its three-year revenue growth rate is only 2.3%, which is poor compared to the wider industry. However, NextEra benefits from consistent profitability. Also, its net margin smokes the field at 26.97%, above 90.85% of its peers. With a return on equity of 17.31%, it’s also one of the high-quality defensive stocks to consider.
Looking to the Street, analysts peg NEE as a consensus strong buy. Their average price target comes out to $89.64, implying nearly 19% upside potential.
Kelly Services (KELYA)
While keeping in the spirit of best safe stocks for market crash, I’m going to dial up the risk-reward factor with the last two ideas. First, staffing agency Kelly Services (NASDAQ:KELYA) might be a compelling idea to consider. Sure, since the beginning of this year, KELYA slipped more than 4%. Also, in the past month, it dipped 1%, which seemingly doesn’t offer much confidence.
However, I’m almost certain that KELYA deserves to be one of the recession-proof stocks to buy now because of layoffs. With pink slips flying across other industries besides technology, desperation should make Kelly Services interesting. Also, the company differs from other staffing firms in that it covers a wide footprint, including manufacturing and logistics.
Financially, investors will point to Kelly’s three-year revenue growth rate of 1.6% below zero. However, the company suffered disproportionately during the Covid-19 crisis. With the pandemic fading but worker desperation rising, Kelly stands ready to rock and roll. Lastly, analysts peg KELYA as a moderate buy. Their average price target hits $24, implying nearly 48% upside potential. Thus, the experts believe it’s one of the low-risk high-reward stocks.
Mercury General (MCY)
Understandably, investors have less-volatile options for best safe stocks for market crash than Mercury General (NYSE:MCY). However, as you’ll see later, the upside for MCY may be phenomenal. Nevertheless, investors shouldn’t ignore the risk. Since the Jan. opener, MCY fell slightly more than 14%. In the trailing one-year period, it’s down a staggering 41%. Of course, I have some explaining to do.
Fundamentally, I appreciate Mercury’s auto insurance business. Let’s face it – the roadways aren’t getting any safer. And people just seem to be on edge these days, meaning that financial protection is a must. Also, for the vast majority of states in the Union, auto insurance is the law. Therefore, Mercury benefits from a captive audience. To be sure, Mercury suffered from the Covid-19 crisis. For instance, its three-year revenue growth rate sits at 2.9% below zero. Also, its book growth rate is 5.4% below breakeven.
Nevertheless, well-respected Raymond James analyst Charles Peters pegs MCY a buy. Also, the expert forecasts a price target of $45, implying over 52% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.