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3 Safe Blue Chip Stocks to Buy as Markets Could Be in Trouble
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Tuesday’s nice rally notwithstanding, some market pros are getting nervous, and with good reason. Despite the inexorable move higher in the markets since the lows in February, there is a rash of headline events coming this summer that could make for a roller-coaster market. In addition, since we appear to be stuck in a trading range, we are back up near the top of the range, and it could roll over again.
In addition to what is already shaping up as a hotly contested race between Donald Trump and Hillary Clinton, the elections in Spain, the potential for the Brexit (the U.K. departure from the European Union), continued slowdowns in China and a host of other lesser issues could really muddy the waters.
With a flight to cash hardly workable for most investors, and Treasury bonds seemingly very rich, quality low-volatility dividend stocks make the most sense. We screened the Merrill Lynch data base for stocks rated Buy with the best volatility risk at the firm. Three look like outstanding choices, and all are on the Merrill Lynch US 1 list of top stock picks.
Coca-Cola Enterprises
This company reported solid earnings, and merger rumors are starting to fly as well. Coca-Cola Enterprises Inc. (NYSE: CCE) is the leading Western European marketer, producer and distributor of nonalcoholic ready-to-drink beverages and one of the world’s largest independent Coca-Cola bottlers. It is the sole licensed bottler for products of Coca-Cola in Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden. The company operates with a local focus and has 17 manufacturing sites across Europe, where the company manufactures nearly 90% of its products in the markets in which they are consumed.
The company reported solid first-quarter earnings, though volumes dropped some. The Merrill Lynch team notes that the pending merger with Coca-Cola Erfrischungsgetränke in Germany and Coca-Cola Iberian Partners, which serves Spain and Portugal, will serve as the next big catalysts. The analysts say that the company has been working on the European registration statement.
Coca-Cola Enterprises investors receive a solid 2.22% dividend. The Merrill Lynch price target for the stock is $58, and the Thomson/First Call consensus target is $56.20. The shares closed on Tuesday at $54.12.
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