As the stock market has been extremely volatile in 2021 due to uncertainty of the future, it's proven to be a challenge for investors to pick the safest stocks on the market. But here we picked these 7 safe stocks that look to be great buys that won't look to bleed your portfolio in challenging times.
7 Long-Term Stocks That Look To Be The Safest Long-Term Buys
In 2021 market volatility has been on the rise due to numerous factors including uncertainty ahead and inflation and it looks as though it could continue moving throughout the year.
The S&P 500 finished 2020 on a good footing, despite the challenges that the pandemic brought to the world that affected all industries in some form. Many companies within various industries benefited extremely from the strong impact that the virus has sprung among us, such as the tech industry and consumer discretionary industry who gained throughout the year leading the S&P 500 to gain 16.26%.
In recent days the S&P 500 index has been on the decline after hitting record highs rising by 30.98 points, or 0.7% on the 7th May 2021 with 11 major sectors performing resulting in sitting in a positive position.
Now in the midst of beginning the world's biggest economic recovery, investors need to be aware and look to make wise and smart investing decisions looking ahead. As volatility looks set to continue according to a recent Morgan Stanley analyst who stated last month that “stocks likely need to take a breather, much as they did in the second quarter of 2021 [...] We should therefore brace ourselves for a lot more stock market volatility in 2021.”
Whether it be volatility within the stock markets, bonds, ETF indexes and more all are proving to be going through challenges. Take a look at portfolio manager Cathie Wood’s ARK Innovation ETF (ARKK) that continued to slide last week, bringing in a total yearly loss of approximately 18%.
In light of the recent happenings investors are now on the hunt for the safest investment options that look to be great long-term additions, looking to keep volatility to a minimum along with offering good value along the way.
7 Long-Term Safe Stocks To Invest In:
- Amazon Inc (AMZN)
- Apple Inc (AAPL)
- Coca-Cola Co (KO)
- McDonald’s Corp (MCD)
- Pfizer Inc (PFE)
- Costco Wholesale Corporation (COST)
- Boston Beer Company Inc (SAM)
Before we head into taking a further look into each of these 7 safe stocks it's worth noting that all of these stocks hold a market capitalisation of over $2 billion, sit on a healthy balance sheet including having a positive cash flow in order to establish further growth and have delivered solid earnings to shareholders over the past 12 months.
1. Amazon Inc (AMZN)
With a market capitalisation of $1.59 trillion and net operating cash flow of $66.06 billion, a 72% growth for the trailing twelve months in 2020 makes this stock the first safe stock to come in on the list to add to your portfolio, if you haven’t already.
AMZN has had an impressive year, to say the least in 2020. The stock reached an annual revenue of $386 billion, a rise of 38% YoY or $100 billion in monetary value. Within the stock's recent Q1 2021 performance the stock continued its solid run showing growth in all areas.
The mega-company reported net sales growth of $108 billion, up by 44% YoY, operating cash flow increased by 69% to $67.2 billion YoY and trailing twelve months (TTM) free cash flow increased to $26.4 billion compared to $24.3 billion YoY. All results out beating analysts estimates for the quarter.
A key point to mention for this stock is that Amazon's Web Service (AWS) remains the key driver behind the stock's positive profitability as it continues to generate. AWS represented just above 12% of the stock's total revenue with revenue exceeding analysts expectation of $13.1 billion in revenue in Q1 as the stock confirmed a result of $13.5 billion.
Whilst Amazon's main e-commerce side of the business is a strong earner, it can be volatile at times leaving the AWS side of the business a solid avenue for the stock to deliver firmer results. This is witnessed with AWS representing 47.0% of total operating income for the company in Q1 2021.
Looking towards the future, the stock released guidance for Q2 2021 with revenues expected to range between $110.0 billion and $116.0 billion, a highside potential of 30% in Q2 and an operating income guidance in the range of $4.5 billion and $8.0 billion, compared to $5.8 billion in Q2 2020.
Amazon has beat the leading S&P 500 index over the past 12 months providing a total return of 46.3%, against the index's return of 43.3%. The stock does come with a hefty price in comparison to other stocks on this list with the stock trading at $3,174 per share pre-market, up from its previous close at $3,151 per share upon writing this report.
Amazon now has more than 200 paid amazon prime members worldwide and the company is continuing to push forward with accelerated growth in all areas making this stock one of the safest investment options on the market.
2. Apple Inc (AAPL)
The leading technology sector surged the most over 2020 rising by 43.89% with Apple Inc (AAPL) gaining a total-return of 82.3% in 2020.
In 2021 AAPL stock has and is going through the mill in terms of volatility within its shares. The stock currently sits upon writing this report in a seemingly undervalued pre-market position of $123.50 per share, up by 0.59% from its previous close.
This dip within the leading tech stocks share price is a great time for investors to buy in on the iconic brand, as the company is showing to have strong upside potential moving forward and after witnessing a record quarter within the company’s recent results.
Within Apple’s second quarter 2021 results the company confirmed a March record revenue, rising by 54% to $89.6 billion YoY with International sales accounting to 67% of the stocks overall revenue result.
Switching to the company’s cash position, AAPL ended its recent Q2 with over $204 billion, resulting in a net cash position of $83 billion at the end of the second quarter after deducting debt payments. This position led the stock to increase shareholders value from operating cash flow, returning $23 billion to shareholders during the quarter with quarterly earnings being $1.40 per share, beating estimates of $0.99 cents per share and confirmed a cash dividend of $0.22 per share.
One good point to mention on Apple stock is that the company started buybacks back in 2012, meaning that if shares lowered Apple will look to buy back outstanding shares. Within the company’s recent results AAPL reported $90 billion in share buybacks in Q2 2021, up from $50 billion in 2020.
The stock witnessed Mac sales up by 70% in Q2 due to the new improved versions installed with M1 chips enabling longer battery life, with strong first-time buyer demand coming in at just under 50%.
iPad sales are also up 79% YoY and the brand's iPhone avenue is still proving to be a strong earner for the stock. The stock's new releases the iPhone 12 and iPhone 12 Pro are designed with purple exterior, improved camera features, benefiting from 5G and much more should witness a strong demand moving forward.
Apple’s shares have returned a total return of just above 90% over the past year, beating the S&P 500 index.
Apple has hit record highs in Q2 2021 in various areas including Apple’s services business gross profit margin holding at 70.1%, and the stock is aiming to improve momentum for the foreseeable making Apple stock a good long-term investment for investors.
3. Coca-Cola Co (KO)
An iconic beverage brand that needs little or no introduction is that of Coca-Cola Co (KO).
Pre-pandemic the stock witnessed good momentum in 2019. The company archived an annual revenue of $37.26 billion, an increase of 8.65% from 2018, to where the stock took a sharp decline brought on due to the COVID-19 pandemic through lack or sales and limited operations, this caused KO stock to declare a total annual revenue result of $33.01 billion, an 11.41% decline from the prior year at the end of 2020.
Fast forward to 2021 the stock confirmed an annual return as of March 31st 2021 for the twelve months trailing of $33.43 billion, a further decline of 10.06%. But this is where the good news now steps in for the brand as the company announced in its Q1 2021 results that the shift is changing as net revenues hit $9.0 billion in Q1, resulting in a 5% rise.
KO stock also confirmed cash from operations was $1.6 billion, compared to $1.1 billion in 2020 brought on from the positive demand, with free cash flow (non-GAAP) being $1.4 billion, from $1.2 billion the year prior.
Another point not to be overlooked is that KO is a valued dividend payer with a dividend yield of 3.1% that the company has raised over the past 57 years.
Q1 results beat Wall Street estimates with the stock reporting EPS of $0.55 per share, beating analysts estimates of $0.50 per share. Alongside, revenue was confirmed at $9.02 billion, against a predicted $8.6 billion expected within the quarter.
KO confirmed that the demand is unchanged within North America and Western Europe due to slower recovery from the pandemic, however global case volume units have been reported to be back at 2019 levels as countries across the globe step closer to normality proving this to be a good clear indication of which way this company is heading.
Aside from the popular fizzy beverages KO stock holds, the company has various brands which include Smartwater+ which was launched across the U.S in 2021 that benefits from unique flavourings and extracts tailored for wellness. Alongside, KO stock has launched the new Coca-Cola with Coffee product across the U.S following a good response Internationally, these are two popular caffeine mixers set to drive future growth.
As the world slowly becomes fully operational KO stock is looking set to pull in positive results globally, seeking to increase value for its shareholders in the long-run. The stock is currently trading near its 52 week high in a seemingly undervalued position within its share price of $54.50 upon writing this report.
4. McDonald’s Corp (MCD)
Another popular name that is known globally across the world as another safe stock to consider investing in is McDonald’s Corp (MCD).
Just like KO stock MCD is known for being a solid dividend payer and holds a dividend yield of 2.3%.
As of writing this report, McDonald's Corp has announced it plans to welcome over 10,000 new employees to their stores for the summer as Covid-19 restrictions ease gloablly, confirming a stronger consumer demand and also looking set to increase employees wages by at least 10%.
Off the back of this news, MCD shares are currently trading up by 1.04% to $230.34 upon writing this report, whilst shares are up just over 6% so far in 2021.
In the stocks recent Q1 report signs of strong improvement are already being witnessed. The stock confirmed that net sales are back to 2019 levels, rising by 9% and within the United States same-store sales witnessed a 13.6% rise within the quarter. Within the stocks international markets Europe, UK and Australia saw a positive sales-growth of 0.6% and across Asia same sales-growth rose by 6.4%. This was pushed heavily by China and Japan and compared to a year prior, sales plummeted by 5.3% in 2020.
The above resulted in the stock confirming a rise in net sales of $5.12 billion in Q1, net income rose to $1.5 billion, a 39% rise, a rise in sales for company-operated restaurants by 7% to $2.16 billion YoY and earnings per share (EPS) of $1.92, beating expected results given by analysts of $1.81 per share.
MCD sits in a free cash flow position as of March 31st at $1.75 billion, up from $1.53 billion at the end of December 2020. Alongside, MCD stock reported operating cash flow of $6.3 billion in FY 2020.
As McDonald’s stock looks to accelerate and maximise both sales and marketing looking ahead by bringing back consumer favourites to its core menu, focusing on its digital, delivery and drive thru avenues by providing and delivering quicker and efficient ways for customers, even as most restaurants slowly open indoor dining globally, this will no doubt continue to increase sales growth over time providing the company to deliver stronger value to its shareholders in both its EPS and its dividend.
Read Also: 5 Growth Stocks that Could Make you Richer
5. Pfizer Inc (PFE)
A pharmaceutical company on the minds of investors to be a safer long-term investment is that of Pfizer Inc (PFE).
As the world pushes forward to get individuals vaccinated against COVID-19, in reality, this is one virus that we all may just have to come to live, proving that Pfizer is going to be an in-demand brand for its vaccine for the foreseeable. Alongside, Pfizer has an array of blockbuster drugs that it develops and produces with strong pipelines that help treat various diseases such as cancer, venous thrombosis and much more.
In the company’s recent Q1 report the stock confirmed that it is looking to seek full U.S FDA approval of its COVID-19 vaccine that it jointly created with Germ drugmaker, BioTech. This means that if the approval gets granted Pfizer will be able to offer the vaccine directly to consumers.
The company reported first-quarter sales of its Covid-9 vaccine beating estimated earnings coming in at $3.5 billion, an approximate rise of above 24% for the quarter. Analysts estimated the Covid-19 vaccine revenue to be $2.2 billion in Q1, resulting in an almost 60% rise above predicted estimates.
Alongside, the company’s other segments still managed to archive over 8% in operational revenues, proving that the stock still generates income aside from the Covid-19 vaccine.
The stock beat all estimates in Q1 with revenue of $14.6 billion, a rise of 8.1% beating analyst expectations for the quarter and adjusted earnings per share (EPS) of $0.93 came above analysts predictions of $0.77 per share, showing an almost 50% growth YoY.
It's worth noting that PFE holds a dividend yield of 3.96%, confirming a declared dividend of $0.39 per common share.
Following the stock's announcement, the company's shares went on the rise to where it is trading as of writing this report above $40 per share.
With the vaccine now being given the go ahead to be given to 12-15 year olds, this adds to the company’s outlook of looking to deliver full-year sales of $26 billion from the COVID-19 vaccine, up from its original guidance of $15 billion. Alongside, the stock confirmed that its cancer drugs hit double-digits in the Q1, confirming that this sector could also rise looking ahead.
It has been reported that the stock has free cash flow of $12.51 billion as of March 31st.
If predictions are correct that COVID-19 will be treated similarly to the flu virus, expect to see Pfizer being the number one player within the COVID-19 vaccine division confirming a long-term successful future ahead.
6. Costco Wholesale Corporation (COST)
The American company Costco Wholesale Corporation (COST) is a solid and reliable stock that has amples of growth prospects moving forward for the U.S economy.
The stock continues to deliver as within its recently announced April sales report the stock achieved a net sales result of $15,21 billion, showing an increase of 33.5% from the same period last year. This resulted in a thirty-five week net sales outcome of $126.58 billion, an increase of just under 18% from $107.64 billion in the year prior.
The stock holds many positives for investors including its solid annual dividend of 3.16% and within its second quarter, COST stock reported earnings of $2.14 per share off the back of net income of $951 million in Q2 2021.
Net sales for Q2 rose by a huge 14.7% to $43.89 billion, up from $38.26 billion in the same quarter last year. Net sales for the first 24 weeks increased by 15.8% to $86.23 billion, alongside gross margin coming in slightly below last year's figure at 10.98%.
But whilst all above is shining lights on this tycoon consumer stock, it's Costco’s e-commerce side of the business that exploded over the quarter with sales being up 75.8% in Q2. This is not factoring in the company’s third-party same-day grocery programme which is up 450%. If all was factored in together CEO Richard Galanti confirmed that the stocks e-commerce segment would have increased to just shy of 100%.
Membership fee income for Q2 2021 was up $65 million to $881.5 million compared to the same quarter a year prior, resulting in membership renewal rates totaling to 91% helping to boost the stocks bottom line.
As of December 31st COST held operating cash flow of $8.86 billion, showing a growth of 39% YoY.
COST is currently trading at $379.53 upon writing this report, up by 1.97% from the stocks open. Analysts further expect the stock to achieve an EPS of $2.27, up from $1.89 per share in 2020 within the stocks next quarter which is expected on or around 27th May 2021.
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7. Boston Beer Company Inc (SAM)
The last safe stock to come in on this list is the promising beverage company Boston Beer Company Inc (SAM).
The stock is continuing to soar throughout 2021 with the company confirming revenue of $545.1 million in Q1, an increase of 64.9% from the same period a year prior. Net income for Q1 increased by a staggering 259.6% to $65.6 million over the quarter and the stock confirmed earning per diluted share was $5.26, an increase of 253% from $3.77 per diluted share in the same period 2020. All above has led to an improved gross margin of 45.8% and blown over all Wall Street estimates as it looks to continue.
The stocks successful results came off the back of Truly Hard Seltzer, Sam Adams and Angry Orchard strong consumer demand, along with depletions (end sales to retail customers) rising by 48% YoY.
Looking ahead the stock is looking to grow depletions and shipments percentage between 40% and 50% and gross margin of between 45% and 47% in midpoint 2021.
As of December 31st 2020 the stock reported free cash flow of $113.41 million.
Based on the stock's recent performance the company holds a ROE 25.65% which is attractive and as the stock looks to continue acceleration in growth further in 2021, this looks as though SAM stock is looking to be a great long-term stock that could even potentially look to explore in different industries as times moves forward.
Overview: 7 Long-term Stocks that Won’t Bleed Your Portfolio
In times of uncertainty looking to these 7 safe stocks to be the perfect investments should be your go-to. These stocks avoid extreme sudden volatility as they all sit within their industries on healthy balance sheets, have strong growth prospects and all seemingly offer good value to investors as some of these stocks have a solid evidence history that spans over and beyond the past 50 years.
Whether it be adding the mega-stock Amazon to your portfolio or having a strong dividend payer such as Pfizer to your collection, having one or more of these stocks will provide diversity and will offer more stability within your portfolio, especially if you have a portfolio mixed with various stocks it will give you that healthy portfolio balance.
On that note, although these 7 stocks above are safer investments it’s wise to understand that these stocks still do come with their own risk elements, which is why it pays to use due diligence before investing in any stock.
How to Invest in the Safest Long-term Stocks
If you are new to stocks and ready to begin your journey into investing in these 7 safe stocks in 2021, we are here to tell you that investing has never been as simple, efficient and as easy and it can all be carried out from the comfort of your own home.
There are plenty of online trading platforms available on the market, all suited for each investor's individual needs. The best guidance is to take your time when looking into various trading platforms as all differ depending on an individual's investing needs. But once you have chosen the right broker and trading platform to begin your trading journey, it's just a matter of opening a trading account and then you are ready to begin investing. It's as simple as that.
Once you have opened an account and have a broker on hand it's worth noting that you do not have to invest straight away. In fact you can take as much time as you need to carry out any additional research, practise trading on a virtual trading platform or simply wait for the right time and the right price to invest in your chosen stocks.
Once you are ready to invest, keeping the long-term image in mind, all you have to do is decide upon the amount you wish to invest within your stock and click buy. Your broker will then take care of it all for you. If no further action is required such as your amount is too low for the stock you are wanting to invest in, no further action will be required on your part unless one day you decide to sell your stock or to check in from time to time.
With that being said, you are all ready to begin your exciting journey into investing in the safest stocks on the market today.
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