Investing

Merrill Lynch Has 5 Safe Haven Stocks to Buy as Market Volatility Continues

PepsiCo

This top consumer staples stock fits the bill for worried investors. PepsiCo Inc. (NYSE: PEP) operates as a food and beverage company worldwide. Its Frito-Lay North America segment offers Lay’s and Ruffles potato chips; Doritos, Tostitos and Santitas tortilla chips; and Cheetos cheese-flavored snacks, branded dips and Fritos corn chips.

The Quaker Foods North America segment provides Quaker oatmeal, grits, rice cakes, natural granola and oat squares, as well as Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Cap’n Crunch and Life cereals, and Rice-A-Roni side dishes.

Pepsi’s North America Beverages segment offers beverage concentrates, fountain syrups and finished goods under the Pepsi, Gatorade, Mountain Dew, Diet Pepsi, Aquafina, Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist and Mug brands, as well as ready-to-drink tea and coffee, and juices.

Holders of PepsiCo stock receive a 2.85% dividend. The $160 Merrill price target compares with the $146.31 consensus target and the most recent close at $134.14, after a 3% gain on the day.

Procter & Gamble

The stock offers a very solid dividend and safety. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products companies, and it operates in five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby & Family Care. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn. Some of these are among the most valuable brands in the world.

The company actually is innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors years of steady growth and dividends.

Shareholders receive a 2.50% dividend. Merrill Lynch has set a $140 price objective. The consensus price target is $129.68, and Procter & Gamble stock closed at $120.55, after rising 3.8% on Tuesday.

Visa

This top credit card issuer is becoming a huge leader in digital pay and is also one of the most valuable brands in the world. Visa Inc. (NYSE: V) operates the world’s largest retail electronic payments network. The company provides processing services and payment product platforms, including consumer credit, debit, prepaid and commercial payments, that are offered under Visa and related brands.

According to Nilson estimates, the company is the largest global credit network (as measured by volume) and the second-largest global debit network.

Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products.

Shareholders receive just a 0.7% dividend. The Merrill price target is $228. The consensus target is in line at $227.82. Visa stock closed Tuesday at $182.60, just shy of a 7% gain for the day.

These five top stocks all have the Merrill Lynch best rating for volatility risk and are far less likely to be caught up in momentum-related selling. The key for investors looking to add these top picks to portfolios is to nibble, to start with very small positions. While the coronavirus scare is similar to past health-related events, we still don’t know how things will play out, so better to be safe rather than sorry.

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