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4 of the Best Stocks to Counter a Tricky Autumn

The S&P 500 may have registered a modest gain on Sep 13 but its rally has mostly paused this month. Lest we forget, the broader index posted its worst weekly performance on Sep 10 since February as most investors remained concerned about a volatile autumn. No doubt, stocks have stayed near record highs after climbing for much of the summer months. However, since September, stocks have started to retreat.

Anyhow, the month of September isn’t favorable for the stock market. Since 1928, the S&P 500, on average, has given a negative return of 0.99% in September, citing a Barron’s article. But it’s just not the S&P 500, the Dow has also witnessed a loss of 0.8% in September dating back to 1950, according to Stock Trader’s Almanac, as mentioned in an Investopedia article.

Nonetheless, a series of headwinds are now threatening to derail the stock market’s upward journey in the near future. After an upbeat second-quarter earnings season and speedy economic recovery, several analysts now believe that economic growth has already peaked. After all, hiring slowed down last month as the spread of the more contagious Delta variant of coronavirus hampered economic recovery. In fact, the Fed’s Beige Book mentioned the slowing down of economic activity from July through August and possibilities of further deceleration in the near term. This certainly doesn’t augur well for Wall Street.

The spread of the Delta variant compelled Americans to put an hold on travel plans, with a measure of their sentiments recently touching the lowest level in almost a decade. By the way, inflation is already weighing on consumers’ confidence and has raised prospects of an economic slowdown. Such developments have now compelled many analysts to lower their forecast for the S&P 500 this year. For instance, Bank of America expects the S&P 500 to decline roughly 5% by the end of the year, citing a Wall Street Journal article. The article further stated that as per Dow Jones Market Data, the upcoming autumn months tend to be the most volatile for the stock market.

Having said that, President Biden’s proposal to raise corporate taxes along with the Fed’s decision to taper its asset purchases may not help drive the S&P 500 to new highs this year. A possible hike in corporate taxes could easily impact a companies’ earnings per share. Similarly, the Fed’s move to wind down its asset purchasing program could turn out to be a dampener for stocks. After all, it’s the central bank’s easy monetary policy that has been driving the stock market amid the pandemic.

But despite concerns looming over the stock market’s upward journey in the near term, investors shouldn’t shun equities completely. Instead, one should invest in stocks perceived to be safe and capable of providing better returns in the near future. Thus, these stocks have low beta and are dividend payers. This means they provide risk-adjusted returns and are fundamentally sound enough to steer through market volatility. We have, hence, highlighted four such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Redwood Trust, Inc. RWT is a self-advised and self-managed real estate investment trust. The company has a beta of 0.97 and a Zacks Rank #1. It has a dividend yield of 5.9%, while its five-year average dividend yield is 8.1%. The company’s expected earnings growth rate for the current year is 3,125%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The CocaCola Company KO is a beverage company. The company has a beta of 0.62 and a Zacks Rank #2. It has a dividend yield of 3%, while its five-year average dividend yield is 3.3%. The company’s expected earnings growth rate for the current year is 15.4%.

Old Republic International Corporation ORI is organized as an insurance holding company whose subsidiaries actively market, underwrite, and provide risk management services for a wide variety of coverages, mostly in the general and title insurance fields. The company has a beta of 0.84 and a Zacks Rank #1. It has a dividend yield of 3.5%, while its five-year average dividend yield is almost 4%. The company’s expected earnings growth rate for the current year is 16.1%.

BCB Bancorp, Inc. BCBP operates as the holding company for BCB Community Bank, a state chartered commercial bank that provides banking products and services to businesses and individuals in the United States. The company has a beta of 0.62 and a Zacks Rank #2. It has a dividend yield of 4.4%, while its five-year average dividend yield is 4.5%. The company’s expected earnings growth rate for the current year is 52.6%.


Tech IPOs With Massive Profit Potential

In the past few years, many popular platforms and like Uber and Airbnb finally made their way to the public markets. But the biggest paydays came from lesser-known names.

For example, electric carmaker X Peng shot up +299.4% in just 2 months. Think of it this way…

If you had put $5,000 into XPEV at its IPO in September 2020, you could have cashed out with $19,970 in November.

With record amounts of cash flooding into IPOs and a record-setting stock market, this year’s lineup could be even more lucrative.

See Zacks Hottest Tech IPOs Now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CocaCola Company The (KO): Free Stock Analysis Report
 
Redwood Trust, Inc. (RWT): Free Stock Analysis Report
 
Old Republic International Corporation (ORI): Free Stock Analysis Report
 
BCB Bancorp, Inc. NJ (BCBP): Free Stock Analysis Report
 
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