By Sarah Ryan, Guest Editor
We screened for low-beta stocks trading at reasonable earnings multiples and positive free cash flow. With stable dividends and earnings growth rates, these can be core holdings for your portfolio, especially during a correction. This is what we uncovered:
Altria Group (MO): As we wrote about here, Altria Group sports a beta of 0.47. The Virginia-based company manufactures and sells cigarettes, wine and tobacco products in the U.S. and internationally through its subsidiaries, including Philip Morris. Altria Group reports a profit margin of 23.12% and an operating margin of 39.31%. The trailing P/E and forward P/E are 13.79 and 11.79, respectively.
McDonald's (MCD): The international fast-food restaurant giant sports a beta of 0.40. McDonald’s has a profit margin of 20.55%, and its operating margin is currently 30.34%. The company has a trailing P/E of 16.55 and a forward P/E of 13.78. This is a safe blue chip to consider today.
Abbott Labs (ABT): Abbott Laboratories sports a beta of 0.29. The company reports a profit margin of 13.16% and an operating margin of 19.85%. Abbott’s trailing P/E and forward P/E are 16.49 and 9.88, respectively. Abbott Laboratories develops, manufactures and sells healthcare products, including pharmaceuticals and diagnostic, nutritional and vascular surgery products. We think this is also one of the 26 safest ideas for the ultimate retirement portfolio.
Exxon Mobil (XOM): Exxon Mobil sports a beta of 0.43. Exxon’s profit and operating margins are 8.86% and 12.37%, respectively. The Texas-based company produces and transports crude oil and natural gas, and also produces petroleum products. Its trailing P/E is 13.16 and its forward P/E is 9.98. We also think this is a stock to watch if the unrest spreads to Saudi Arabia, as we wrote about here and here.
Kinder Morgan Energy Partners (KMP): Kinder Morgan Energy Partners, L.P. owns and manages transportation and storage assets that deliver, transport and store gasoline, diesel and jet fuel and natural gas, among other energy resources. It sports a beta of 0.34. Kinder Morgan Energy Partners has a trailing P/E of 51.42 and a forward P/E of 33.14. Its profit margin is currently 16.30%, and its operating margin is 19.94%. We also like KMP's management, as we wrote about here.
Wal-Mart Stores (WMT): Wal-Mart Stores, Inc., sports a beta of 0.37. The Arkansas-based Wal-Mart Stores, Inc. operates retail stores in the U.S. and internationally, including discount supercenters, supermarkets, and department stores. Its current profit margin is 3.89%, and its operating margin is 6.06%. Wal-Mart’s trailing P/E is 11.80, and its forward P/E is 10.79. We also think this is a safe blue chip stock for retirees to consider.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
