It’s hard to find stocks right now that have generated positive returns, particularly among those that are not taking advantage of the tailwind of a cyclical sector that is doing well in this market environment. But there are some stocks that have not only navigated well in this market, but have managed to thrive no matter what the market is doing.
Here are three all-weather stocks that could not only boost your portfolio now, but over time.
Coca-Cola Co. (KO -0.67%) has been a model of consistency over the years. Testimony to this is the fact that the beverage company’s stock has only had one negative year since 2008 (when looking at total returns), and the negative year barely qualifies, as its negative total return of 0.34% in 2016 it remains flat. even this year, Coke has managed to outperform as it is essentially flat year to date, with the stock trading at around $59 per share.
Coca-Cola has not been devoured by the bear market, as revenue rose 16% year-over-year to $10.5 billion in the first quarter and earnings per share rose 23% to $0.64 a year. after year. In addition, it has been very efficient, with an operating margin that jumped to 32.5%, compared to 30.2% in the first quarter of 2021. Coca-Cola has been able to navigate this inflationary environment thanks to its iconic brand, market leadership and pricing power. . These factors have allowed him to increase prices without hurting sales. In the first quarter, 7% of its revenue growth came from price changes, while 11% came from concentrate sales.
The other benefit of Coca-Cola, particularly in this market, is its dividend. Coca-Cola is a dividend king, meaning it has increased its dividend every year for more than 50 years, 59 years to be exact. It currently pays a quarterly dividend of $0.44 per share with a yield of 2.87%.
2. Berkshire Hathaway
Berkshire Hathaway (BRK.A -3.03%) (BRK.B -3.12%) is another iconic brand, led by Chairman and CEO Warren Buffett, who has been remarkably consistent. The company’s stock price has averaged 13.2% annualized over the past 10 years (as of June 13), while the S&P 500 it has returned about 11% per year over that same period. Berkshire Hathaway shares are down 6% year to date compared to the S&P 500 which is down 22% year to date.
Berkshire Hathaway’s performance is linked to its CEO, considered one of the best investors of all time, as well as its business model and strategy. It is a holding company with two main arms in its business. He has a stock portfolio worth approximately $300 billion. This includes positions in nearly 50 public companies, including Coca-Cola, which is one of its five largest holdings. Other major holdings include Apple, Bank of AmericaY American Express. Berkshire Hathaway it also owns a portfolio of companies, including GEICO, Duracell, Dairy Queen, Benjamin Moore, and Fruit of the Loom, to name a few.
Buffett and his team focus on investing in stocks and businesses that are priced below their intrinsic value. He also looks for companies with strong competitive advantages, among other criteria. While Berkshire Hathaway may not make the huge profits that some of the tech companies experienced during bull markets, the company tends to do better when markets are down and value is in its favor. Plus, it has more than $100 billion in cash, so it’s well capitalized to navigate downturns and use that cash for future growth.
3. master card
MasterCard (BREAST -4.57%) is the second largest credit processor and, along with Visa (v -3.01%), forms a duopoly in space. This gives Mastercard (and Visa, for that matter) a huge competitive advantage based on a massive network through which payments flow. MasterCard It also has the advantage of its business model, as it earns money from the fees charged every time someone makes or processes a payment on its network. As such, Mastercard has little overhead and no credit risk associated with making loans, and it generates huge margins.
Mastercard has posted an average annual return of 23% over the past 10 years as of June 13, and while its stock price is down 10% in 2022, that reflects more the overall growth of the stock sell-off than performance. from MasterCard. In this first quarter, marked by high inflation, the Russian invasion of Ukraine and an economic slowdown, Mastercard saw revenue increase 24% year over year to $5.2 billion and net income increased 44% to $2.6 billion.
As mentioned, Mastercard has huge margins, with an operating margin of 55% and a profit margin of 47%. In addition, it is extremely efficient, with an extraordinary return on capital of 139%. As we have seen this year, its duopoly allows it to perform well even when markets are down, and its growth should take off when markets recover.
Like Coca-Cola and Berkshire Hathaway, Mastercard has unique advantages that make it an all-season stock.