Anika Begay
For investors looking to find safe havens in a volatile market, there are a number of large-cap names, particularly in the healthcare sector, that could be interesting investments. Stocks had some wild trading sessions after Monday’s sharp global sell-off and ended the week higher at levels that nearly 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 Federal Reserve rate cuts and an easing of the yen’s “carry trade.” Vscek Pro scoured FactSet to find companies in the S&P 500 that could be reliable stocks in this volatile market. These stocks have low share price volatility over the past five years and their total return, including share price gains and dividends, is greater than the S&P 500’s over the past five years. They are also holding up well in the short term and are attractively valued, as each stock has gained 5% or more over the past three months and has a forward price-to-earnings ratio lower than the broad market index, which is 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 over the past few years. Pharmaceutical company AbbVie’s gain of about 262% over the past five years is the highest among the group. The shares are up 22.6% this year and have seen a quarterly change of 18.7%. Morgan Stanley Wealth Management recently added AbbVie to its U.S. model portfolio. In a note on August 1, it cited the company’s “recent strong momentum in immunology that effectively fills in lost Humira 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 continues to weigh on sales. However, some patients are switching to AbbVie’s Skyrizi and Rinvoq immunology treatments, the company’s management said. Amgen’s share price has a five-year total return of 104%, making it a steady but still the slowest-growing on the list. Shares have risen nearly 12% this year. The company on Tuesday raised its full-year earnings outlook and posted weaker-than-expected second-quarter profit, citing higher operating expenses, including costs related to the development of its experimental obesity drug MariTide. Wells Fargo analyst Mohit Bansal downgraded Amgen shares to equal weight with a $335 price target, implying only 3.2% potential upside, 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 volatility of 6.2 and a 152% gain over the past five years, T-Mobile is another stock that’s been delivering steady returns on a short-term basis. Shares have gained more than 21% year-to-date, significantly outpacing the broader market’s returns this year. The mobile network operator beat both high and low estimates for the second quarter and also raised its full-year customer addition forecast, according to its earnings release on July 31. Analysts at several firms, including TD Cowen and Barclays, raised their price targets on T-Mobile after the report. Barclays analyst Kannan Venkateshwar, who raised his price target by $20 to $200, said the company continues to outperform operationally and its guidance for subscribers is cautious. Other stocks with low volatility and attractive valuations include auto parts retailer AutoZone and insurance company Aflac. —Vscek’s Christopher Hayes contributed reporting.
