For investors who want to find safe plays amid a volatile market, there's a whole set of large-cap names — particularly in health care — that could make for attractive investments. Stocks had a wild few trading sessions after Monday's steep global sell-off, and closed the week up at levels that almost reversed its weekly losses. The three major U.
S. indexes initially tumbled on weaker-than-expected U.S.
payrolls data, concerns about the Federal Reserve's rate-cutting pace and an unwinding of the yen "carry trade." CNBC Pro screened FactSet to find companies in the S & P 500 that could be reliable plays amid this stormy market. These stocks have low share price volatility over the past five years, and their total return — including share price gains and dividends — are greater than the S & P 500's over the past five years.
They're also holding up well in the near term and are attractively valued, as each stock has gained 5% or more in the past three months and has a forward price-to-earnings ratio less than the broad-market index's, meaning 21 or less. Take a look at the names below: Health-care companies Amgen , UnitedHealth Group and AbbVie are among the names with low volatility and strong returns in recent years. Pharmaceutical company AbbVie's roughly 262% gain over the past five years is the highest of the stocks in the group.
Shares are up 22.6% this year, and have seen a three-month change of 18.7%.
Morgan Stanley Wealth Management recently added AbbVie to its U.S. model portfolio.
In an an Aug. 1 note, it cited the company's "strong recent momentum in immunology that effectively bridges lost Humira revenues, setting the company up 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 of the patients are moving to AbbVie's immunology treatments Skyrizi and Rinvoq, the company's management has said. Amgen's share price has a 5-year total return of 104%, making it a steady grower, but still the slowest of the list.
Shares are up nearly 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 tied 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 just 3.
2% potential upside, saying that 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 152% gain over the past five years, T-Mobile is yet another stock that hands out consistent returns on near-term basis.
Shares have gained more than 21% year to date, significantly outperforming the broader market's returns this year. The mobile network operator beat top and bottom line estimates for the second quarter, and also raised its full-year customer addition forecast, according to its earnings posted on July 31. Analysts from 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 subscriber guidance is conservative. Other stocks with low volatility and attractive valuations include automotive replacement parts retailer AutoZone and insurance company Aflac . —CNBC's Christopher Hayes contributed reporting.
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