Investing
5 Stocks to Buy Now If You Fear a Trade War Market Crash
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This is probably territory most investors are very uncomfortable with. The fear of a massive global trade war is one that has just not been part of the investing lexicon in years, and while there is a good chance it gets resolved, there is always the chance it stays in the news and percolates.
So what are confused investors to do now? The Federal Reserve just raised the federal funds rate for the second time this year, and it now looks like there will be two more increases to come. Despite that knowledge, worried investors seeking safety have bid the Treasury market up, with the 10-year bond yield back well below the 3% level.
What makes sense now is to buy safe stocks that pay dividends and provide products or services that will continue to be bought or used regardless of what the overall equity market does. We screened the Merrill Lynch research universe and found five companies rated Buy that fit the bill perfectly.
This maker of tobacco products has been hit hard and offers value investors a great entry point now. Altria Group Inc. (NYSE: MO) is a top mega-cap consumer discretionary stock to buy, and the company’s Marlboro brand remains one of the most recognizable in the world. To diversify away from cigarettes and cigars, Altria has expanded its portfolio into new categories like wine and e-cigarettes. The company also holds a 10% stake in brewer Anheuser-Busch.
Cash flow generation and the return of cash to Altria shareholders remain key facets of the company’s total shareholder return plan. The analysts expect continued support of the strong dividend, in addition to continued share repurchase activity.
Altria released first-quarter results that rose from the same period last year, but despite the strong report, the stock was hit hard, and it still trades near a 52-week low.
Altria investors are paid a hefty 4.93% dividend. The Merrill Lynch price target for the shares is $70, and the Wall Street consensus estimate is set at $70.38. The shares traded early Wednesday at $56.85.
With a huge deal in place, this company is poised to become the biggest refinery in the United States. Marathon Petroleum Corp. (NYSE: MPC) is already one of the largest independent petroleum refining and marketing companies in the United States. It is based in Findlay, Ohio, and owns seven refineries in the United States with total throughput capacity of around 1.7 million barrels per day.
The company operates approximately 2,750 retail sites under the Marathon and Speedway brands. In addition, it operates a logistics network of pipelines, barges, trucks and terminals that store and transport crude and products.
Marathon Petroleum has agreed to buy rival Andeavor for $23.3 billion in the biggest-ever deal for an oil refiner, and most on Wall Street believe that they can achieve the $1 billion in synergies they have suggested.
Shareholders are paid a 2.47% dividend. Merrill Lynch has a $95 price target for the stock, while the posted consensus target is $93.60. The shares traded at $74.60 Wednesday morning.
The fast-food giant does a ton of business overseas and still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global foodservice retailer, with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business persons.
The company posted solid first-quarter results and shares took off, as menu price increases fueled the big earnings beat. Same-store sales in the United States grew 2.9%, in line with analyst expectations. Global same-store sales were also strong, rising 5.5% and topping estimates of 3.7%, as the number of customers coming through the door rose 0.8%.
Where better for busy American families on vacation to stop and get a meal than the golden arches, where years of familiarity and thousands of locations make it a reasonable and good fast-food experience.
McDonald’s shareholders are paid a nice 2.45% dividend. The $190 Merrill Lynch price target compares with a consensus price objective last seen at $186.73. The shares traded at $164.65.
This remains a leading health care stock for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.
The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.
Merck shareholders receive an outstanding 3.15% dividend. Merrill Lynch has set its price target at $70. The posted consensus target is $69.02, and the shares were trading at $61.25.
The stock of this top telecommunications company offers tremendous value and is still down almost 15% from highs posted back in February. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world.
Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.
The company reported better-than-expected first-quarter results, as the wireless carrier lost fewer monthly phone subscribers than feared and the company’s chief financial officer said it was continuing to explore a new video service.
Verizon investors are paid an outstanding 4.87% dividend. The Merrill Lynch price target is $58. The consensus target is $55.88, and the stock was trading at $48.30 a share.
These five companies all provide goods or services that will still be in big demand regardless of what the stock market does. They all provide safety, solid growth potential and, best of all, reliable dividends that can sure soften the blow if the market sees take a big dive.
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