If Trump Wins, Look Out: 5 Ultra-Safe Stocks to Hide Out In
Think about it. One year ago, anybody would have bet that there is no way that Donald Trump would be the nominee for President of the United States. Then he proceeded to face off against a who’s-who of Republican contenders and bested them all. Now, with less than a week left until the election, due to a litany of reasons we all know about, he is even or ahead in some polls and battleground states.
The reason that may be bad for the stock market is that Wall Street favors Hillary Clinton for a variety of reasons. The major one is she is known quantity, and regardless of how you feel about her stances on issues, they are at least something that Wall Street is familiar with. Trump on the other hand is a whole different ballgame, and he may look to shake up the status quo in a big way.
While any dip in the markets may be brief if he is elected, it could be steep. We screened the Merrill Lynch research universe for their safest stocks, as ranked by volatility risk, that pay dividends and are rated Buy. Five look like solid choices now.
This company has had an incredible run this year but is off over 10% in less than six weeks. AT&T Inc. (NYSE: T) is the world’s largest provider of pay TV, with TV customers in the United States and 11 Latin American countries. In the United States, the AT&T wireless network has the nation’s self-described strongest 4G LTE signal and most reliable 4G LTE. The company also helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions.
With its shares trading at a very cheap 14.3 times estimated 2016 earnings, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic but increased device financing plans.
AT&T is in the Merrill Lynch US 1 portfolio and has several major catalysts that likely will drive strong network traffic demand: DirecTV Now and Mobile, “Data-Free TV” for DirecTV/U-verse subscribers and increasing penetration of unlimited data plans. Many on Wall Street believe that the company is well-positioned to address ongoing traffic requirements, with additional LTE capacity available and the ability to leverage small cell deployments.
The company announced a deal to Buy Time Warner for about $80 billion, which translates to about $105 to $110 per share. Two years ago, Time Warner rebuffed a takeover bid from 21st Century Fox at $85 per share. The chatter started on Thursday and carried into Friday, with a deal being announced over the weekend. The stock was hammered on Friday, after already being knocked down as the fear of rising rates hit the telecoms.
AT&T investors receive a 5.36 % dividend. The Merrill Lynch price target for the stock is $46. The Wall Street consensus price objective is $41. Shares closed Tuesday at $36.56.
This top dividend payer is also a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) is the stock to buy in consumer staples. The company continues to deliver solid execution and is one of the best-positioned companies in the consumer staples sector, given its strong brands in attractive categories, particularly oral care.
More than half (52%) of total revenues at Colgate are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across the Brazil, Russia, India, China (BRIC) regions. While those have slowed over the past year, a pickup in growth could be coming.
Back in the spring, Colgate increased the quarterly common stock cash dividend by 3%. The new quarterly dividend is $0.39 per share on its common stock.
Investors are now paid a 2.2% dividend. Merrill Lynch has an $80 price target, and the consensus target is $76.81. Shares closed Tuesday at $70.99.