As market volatility picks up steam after a prolonged period of calm, concerns around inflation, impending elections, and seasonal fluctuations loom over investors. To shield your portfolio from turbulence, it’s prudent to consider trimming growth stocks and introducing crash-resistant equities into your investment mix.
The Current Landscape
With inflation persisting and U.S. elections on the horizon, the investment climate remains uncertain. Seasonal trends, such as the traditional “sell in May and go away” adage, could further add to market unease following a robust performance streak of over five months since November 2023.
Kimberly-Clark (KMB): A Pillar of Stability
Among the lineup of crash-resistant stocks, Kimberly-Clark (NYSE: KMB) stands out as a stalwart option. Trading at a reasonable forward earnings multiple of 19, Kimberly-Clark offers essential personal care and consumer tissue products across 175 countries, catering to a significant portion of the global population.
Despite a slight dip in net sales, the company reported robust Q1 2024 results with a 6% growth in organic sales and notable enhancements in gross margins and operating profits. Management’s positive outlook for 2024 projects steady growth in organic net sales and adjusted earnings per share, bolstered by the indispensable nature of its consumer products.
Progressive (PGR): Navigating the Bumps
With a 30% year-to-date surge, Progressive (NYSE: PGR) exemplifies resilience in the face of market challenges. Boasting a low beta of 0.35, Progressive is primed to weather market corrections while benefiting from the mandatory nature of auto insurance and recent premium hikes.
Driven by innovation and market strategies like telematics adoption, Progressive has consistently expanded its market share within the highly competitive auto insurance industry. Analysts foresee further growth potential, with expectations of market share surpassing 18% by 2028, cementing its status as a go-to crash-resistant stock.
General Mills (GIS): A Fort in Challenging Seas
Amidst market uncertainties, General Mills (NYSE:GIS) emerges as a beacon of stability. Offering a range of consumer staples, General Mills’ focus on essentials resonates well with investors seeking refuge from market fluctuations.
The company’s resilient performance and strategic positioning bode well for continued growth, making it a compelling choice for investors looking to navigate through market volatility unscathed.
General Mills: A Breakfast of Champions in the Stock Market
The Cereal Dominance
General Mills, trading as GIS on NYSE, reigns supreme on the breakfast table, holding a leading position in the lucrative $10 billion cereals market. With a lineup of powerhouse brands like Cheerios and Nature Valley, the company has secured its spot for continued market leadership and robust retailer relationships.
Diversified Revenue Streams
Beyond its cereal empire, General Mills boasts a resilient pet business that stands strong against market turbulence. The pet food division, particularly Blue Buffalo, contributes a notable 12% to the company’s revenues. Offering a range of wet pet food, pet treats, and dry pet food, this segment has consistently fueled organic sales growth.
Expansion Strategies
Striding towards growth, General Mills has strategically enhanced its pet business while tapping into global markets. An exemplary move in this direction was the recent acquisition of Edgard & Cooper, a rapidly expanding pet food enterprise in Europe. This strategic deal not only brings in premium pet brands but also establishes strong distribution networks across 13 European markets.
Resilient Investment Opportunity
Backed by its cereal dominance and robust pet business, General Mills emerges as a resilient investment opportunity in the financial arena. As the pet business continues to expand and form a more substantial portion of the total revenues, the company is set for long-term revenue growth. Moreover, trading at just 16 times forward earnings, this consumer staple presents itself as a lucrative bargain. With a low beta of 0.12, the stock ensures stability by minimizing volatility and providing downside protection.