For investors looking to find safe plays amid a volatile market, there’s a whole host of large-cap names — particularly in healthcare — that could be attractive investments. Stocks have had a wild few trading sessions after Monday’s sharp global selloff, closing out the week at levels that roughly reversed their weekly losses. The three major U.S. indexes initially fell on weaker-than-expected U.S. payrolls data, concerns about the pace of interest rate cuts by the Federal Reserve and the unwinding of the yen’s “carry trade.” CNBC Pro scoured FactSet to find companies in the S&P 500 that could be reliable plays amid this turbulent market. These stocks have low share price volatility over the past five years, and their total return — including share price gains and earnings — is greater than the S&P 500’s return over the past five years. They’re also holding up well in the near term and attractively valued, with each stock gaining 5% or more in the past three months and a forward price-to-earnings ratio that’s lower than the broad market index, meaning 21 or less. Take a look at the names below: Healthcare companies Amgen, UnitedHealth Group and AbbVie are among the names with low volatility and strong returns in recent years. Pharmaceutical company AbbVie’s gains of about 262% over the past five years are the highest among the stocks in the group. Shares are up 22.6% this year, and have a three-month change of 18.7%. Morgan Stanley Wealth Management recently added AbbVie to its U.S. model portfolio. In an Aug. 1 note, it cited the company’s “strong recent momentum in immunology that effectively plugs Humira’s lost revenue, positioning the company for strong EPS growth over the medium term” for the call. Second-quarter global net revenue for Humira, which treats severe rheumatoid arthritis, Crohn’s disease and ulcerative colitis, fell 29.8% from the same quarter in 2023, as competition from cheaper biosimilars continued to weigh on sales. However, management said some patients are switching to AbbVie’s immunotherapies Skyrizi and Rinvoq. Amgen’s five-year total return is 104%, giving it steady growth but still the slowest on the list. Shares are up about 12% this year. The company on Tuesday tightened its full-year earnings outlook and posted weaker-than-expected second-quarter profit, citing higher operating expenses, including costs associated with developing its experimental obesity drug MariTide. Wells Fargo analyst Mohit Bansal cut Amgen’s stock to equal weight with a $335 price target, implying only 3.2% upside potential, saying analysts are already pricing in the company’s MariTide success with the company’s outperformance over the past year. With a five-year price swing of 6.2 and a 152% gain over the past five years, T-Mobile is another stock that’s paying steady dividends on a near-term basis. Shares have gained more than 21% so far this year, significantly outperforming the broader market’s returns this year. The mobile network operator has beaten top- and bottom-line estimates for the second quarter and raised its full-year customer addition forecast, according to its earnings release on July 31. Analysts from several firms, including TD Cowen and Barclays, raised their price targets on T-Mobile following the report. Barclays analyst Kannan Venkateshwar, who raised his price target by $20 to $200, said the company continues to outperform operationally and that its subscriber guidance is conservative. Other stocks with low volatility and attractive valuations include auto parts retailer AutoZone and insurer Aflac. —CNBC’s Christopher Hayes contributed to the report.
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These low-volatility stocks have a winning track record and are attractively valued.
