Wall Street is all about statistics. One of the grim ones is the fact that the last 10 trading days of September are typically the worst of the year. In addition, some of the worst market crashes in U.S. history have occurred in the month of October. One of the biggest was on October 29 of 1929, when on Black Tuesday the Dow Jones industrial average completed a multiday sell-off that lost nearly 25% of its value, helping to usher in the Great Depression.
In 1987, on Black Monday October 19, an even more sudden collapse hit the stock market when computerized trading played one of its first major roles in destroying stocks. The Dow fell by about 22%, the largest ever percentage drop in a single day. Now with everything from a hot war in Ukraine to soaring energy prices and interest rates, a very divided country along political lines, huge government debt, a very aggressive China, and the potential for a government shutdown looming, we could be in serious trouble.
For those seeking shelter from the coming storm, short Treasury paper makes a ton of sense. It can be bought directly from many banks and brokerage firms or, of course, a broker can assist in buying. The six-month T-bill is priced to yield 5.55%, while the one-year bill yields 5.46%.
For those looking for safe stocks, we screened the Berkshire Hathaway portfolio looking for the safest names that pay among the largest dividends. The following seven stocks hit our screens. While Warren Buffett loves them, along with top Wall Street analysts, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This integrated giant is a safer way for investors looking to get positioned in the energy sector, and shares have backed up some. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide. The company operates in the following two segments.
The Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.
The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil, refined products and lubricants; manufacturing and marketing of renewable fuels; transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses and fuel and lubricant additives. It is also involved in cash management and debt financing activities; insurance operations; real estate activities; and technology businesses.
Chevron posted strong second-quarter results and has a solid place in the sector when it comes to natural gas and liquefied natural gas (LNG). It remains one of the best ways to play energy safely.
The company sports a 3.63% dividend. UBS has a $209 target price on Chevron stock, while the consensus target is just $175.63. The shares closed on Monday at $168.71.
This stock not only offers safety but comes with an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It remains a top Buffet holding, as he owns a massive 400 million shares.
Led by Coca-Cola, one of America’s most trusted food and drink brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Investors receive a 3.20% dividend. HSBC Securities has set its target price at $74. Coca-Cola stock has a consensus of $69.86, and the closing share price on Monday was $57.00.
This is one of the largest producers of alcoholic beverages in the world. Diageo PLC (NYSE: DEO) produces, markets and sells alcoholic beverages worldwide, including scotch whiskey, gin, vodka, rum, beer, Irish cream liqueurs, wine, Raki, tequila, Canadian and American whiskey, Cachaça and brandy, as well as adult beverages and ready to drink products. The company’s premium brands include Johnnie Walker, Smirnoff, Captain Morgan, Baileys, Tanqueray and Guinness.
Diageo’s reserve brands include Johnnie Walker Blue Label, Johnnie Walker Green Label, Johnnie Walker Gold Label 18-year-old, Johnnie Walker Gold Label Reserve, Johnnie Walker Platinum Label 18-year-old, John Walker & Sons Collection, Johnnie Walker The Gold Route, Johnnie Walker The Royal Route and other Johnnie Walker super-premium brands, as well as The Singleton, Cardhu, Talisker, Lagavulin and other malt brands.
Shareholders receive a 2.60% dividend. The BofA Securities price target is $196, and the consensus target is $181.90. On Monday, Diageo stock closed at $152.90.
Even in bad times, everybody has to eat, and Kraft Heinz Co. (NASDAQ: KHC) always stands to benefit. The company was formed almost eight years ago in the merger of H.J. Heinz and Kraft Foods. The company is a leading global food company, with $25 billion in annual revenues generated by such well-known brands as Kraft, Heinz, Oscar Meyer and Maxwell House. It is also one of America’s most trusted food and drink brands.
The company is the third largest food and beverage manufacturer in North America and derives 76% of revenues from that market and 24% from overseas. The company’s other brands include ABC, Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, Weight Watchers Smart Ones and Velveeta. Buffett holds a big position in the Berkshire Hathaway portfolio.
Kraft Heinz stock comes with a 4.68% dividend. The $48 BofA Securities price target compares with a consensus target of $40.60 and Monday’s close at $34.32.
This grocery chain giant is always a solid idea when the going gets rough as people tend to go out less. Kroger Co. (NYSE: KR) operates as a retailer in the United States with a focus on combination food and drug stores, multi-department stores, marketplace stores and price impact warehouses.
Its food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood and organic produce. Its multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products and toys.
Kroger’s marketplace stores offer full-service grocery, pharmacy, health and beauty care, and perishable goods, as well as general merchandise, including apparel, home goods, and toys. The price impact warehouse stores provide grocery and health and beauty care items, as well as meat, dairy, baked goods and fresh produce items.
The company also manufactures and processes food products for sale in its supermarkets and online, and it sells fuel through 1,613 fuel centers. As of January 29, 2022, it operated 2,726 supermarkets under various banner names in 35 states and the District of Columbia.
The dividend yield here is 2.54%. Kroger stock has a $65 target price at BofA Securities. The consensus target is just $50.37, and on Monday the shares closed at $45.71.
This consumer sector giant makes good sense for conservative investors. Mondelez International Inc. (NASDAQ: MDLZ) manufactures and markets snack food and beverage products worldwide. It offers biscuits, including cookies, crackers and salted snacks; chocolates, and gums and candies; powdered beverages and coffee; and cheese and other grocery products.
The primary Mondelez brand portfolio includes LU, Nabisco and Oreo biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolates; Trident gum; Jacobs Kaffee; and Tang powdered beverages.
The company sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets through direct store delivery, company-owned and satellite warehouses, distribution centers and other facilities, as well as through independent sales offices and agents.
Shareholders receive a 2.41% dividend. The HSBC Securities price target of $84 is higher than the $83.33 consensus target. Mondelez stock closed and $69.71 on Monday.
Procter & Gamble
This company offers a very solid dividend and a host of recognizable products. Procter & Gamble Co. (NYSE: PG) is one of the world’s largest consumer products firms and one of the oldest companies in the Fortune 500. Its many brands include Pampers, Tide, Bounty, Charmin, Gillette, Oral B, Crest, Olay, Pantene, Head & Shoulders, Ariel, Gain, Always, Tampax, Downy and Dawn.
The company sells its products through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, baby stores, specialty beauty stores, high-frequency stores and pharmacies. The company has been very innovative in its product development process and uses that to help ensure future growth and cash flow. This should provide investors with years of steady growth and dividends.
Investors receive a 2.47% dividend. HSBC Securities recently started coverage on Procter & Gamble stock. The firm’s $179 price objective is well above the consensus target of $156.29 and the most recent close at $150.66 a share.
The market is teetering, as much of the incoming data is negative. With tens of thousands of layoffs, the potential for earnings blow-ups are rattling investors, and the possibility for more downside is very strong. While the sell-side on Wall Street is always looking for the proverbial bright side, the reality is we could be on the precipice of a big move lower, and safe stocks are the way to go now.
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