With the U.S. markets and the economy being held hostage by an all-out trade war with China, and perhaps the most gridlocked Washington, D.C., we have seen in a lifetime, investors are wondering where they should be positioned. The “sell in May” theory seemed to be working just fine, but the indexes are still rather close to their all-time highs.
It turns out that investors look for nuggets even during harder times for the stock market. After all, it’s really a market of stocks rather than a stock market, and some companies and sectors thrive during periods of uncertainty.
24/7 Wall St. has identified nine large and well-known companies in which investors seem to care less about China, trade wars and even politics. We have included valuation data and price target data from Refinitiv on some of the names, and investors should realize that these all-time highs are generally at a premium to peers and sectors.
American Tower Corp. (NYSE: AMT) hit a new all-time high of $203.82, but it was last seen down at $202.65 for just a 1% gain on Thursday. This company could face more concentrated carrier dominance if Sprint is acquired by T-Mobile, but the investing community doesn’t seem to care on this day. American Tower is now $10 over its consensus target price and up over 28% so far in 2019. Its dividend is still only 1.8% or so.
American Water Works Co. Inc. (NYSE: AWK) just seems to keep ratcheting higher and higher on bad days in the market, and it having the highest P/E ratio of all large utilities hasn’t seemed to matter. Water is, of course, the ultimate defensive stock strategy of them all. The stock was up 0.5% at $113.36, in a 52-week range of $77.73 to $113.66. Its consensus target price is $109.83.
CubeSmart (NYSE: CUBE) is proving that self-storage is still a great business. It hit a high of $33.43 and is now valued at more than $6.3 billion. It also has a dividend yield of 3.8% that may still keep REIT investors interested. That said, its consensus target price is $32.22.
Flowers Foods Inc. (NYSE: FLO) was last seen trading up 1.3% at $23.30, after boosting its dividend by more than 5% to $0.19 per quarter for a $0.76 annualized payout. That’s going to generate close to a 3.3% dividend yield for new investors, but investors are now paying 24 times expected 2019 earnings for the brand-name maker of bread, buns, rolls, tortillas and snack cakes.
NextEra Energy Inc. (NYSE: NEE) is the largest U.S. utility by market cap at $97 billion, and defensive investors seem likely to make this the first $100 billion utility in U.S. history. NextEra was up 0.5% at $202.90, with a 52-week range of $155.06 to $203.44 and a consensus target price of $198.37.
PepsiCo Inc. (NYSE: PEP) has proven that it is living up to being defensive all over again, despite having significant overseas exposure. The shares even hit a 52-week high of $130.90, which is also an all-time high. This is now a beverage and snack giant valued at 23.7 times expected 2020 earnings, or a more palatable 21.7 times expected 2020 earnings.
Restaurant Brands International Inc. (NYSE: QSR) just hit an all-time high of $69.25. The owner of Tim Horton’s, Burger King and Popeye’s doesn’t seem to care about China. It also has a dividend of about 3%, but investors might take note that it has a consensus target price of $70.50 and is now valued at more than 25 times current year expected earnings.
Roku Inc. (NASDAQ: ROKU) might seem surprising to see as an all-time high ($89.78) with a $10.1 billion market cap. Then again, it is a cost-saver for those who want to be cord-cutters and ditch their cable or satellite provider. Still, Roku is losing money, and it’s valued at nearly 10 times expected 2019 sales (or valued at a “more reasonable” 7.2 times 2020 expected sales).
STORE Capital Corp. (NYSE: STOR) hit a high of $34.38, and it now has a market cap of $7.8 billion. It comes with a juicy 3.8% dividend yield. Perhaps the draw for this large tenant real estate player is that Berkshire Hathaway holds more than an 8% stake in the company.