It always helps to take a high-level view of the major indices in the market during periods of market volatility and corrections. With plenty of tech stocks well off their 52-week highs and puzzling divergences appearing across the market, many investors are struggling to get a clear read on where the market might be heading. However, one thing is clear at this time – the Dow Jones Industrial Average is showing serious strength. This stock market index that measures the performance of 30 large companies recently hit new all-time highs and confirms that money is flowing into blue-chip stocks with stable earnings.
There are several benefits associated with Dow Jones stocks to consider at the moment. Since many of these companies are low-beta stocks, they aren’t as susceptible to the wide volatility swings we’ve been seeing in the market lately. They are also typically known to offer growing dividend payments and have strong business models that investors can bank on for long-term growth. If you are interested in lower-risk investment options that can pay off over the years, take a look at the following list of 3 low-volatility Dow Jones stocks that you can buy with confidence.
The Coca-Cola Company (NYSE:KO)
Sometimes when you aren’t sure of what direction the market is heading in, it can be a great idea to add companies with huge competitive advantages and well-known brand names that might be getting overlooked. This is exactly the case with The Coca-Cola Company, which is the largest nonalcoholic beverage entity in the world. Its products are sold in over 190 countries and the company owns or licenses more than 500 brands, which includes iconic names like Coca-Cola, Sprite, Fanta, Vitaminwater, Powerade, and Minute Maid.
This is a Dow Jones Industrial Average stock that hasn’t done much over the last year, which probably has a lot to do with the fact that its sales have been negatively impacted by the pandemic. That perception could be changing soon as people begin heading back to restaurants, movie theaters, and event venues and enjoying this company’s delicious beverages again. Optimism is also warranted about the company’s sales growth potential in emerging markets, where only a quarter of beverages that are consumed are commercial beverages. Finally, the fact that Coca-Cola offers investors a 3.3% dividend yield and has a 10-year dividend growth rate of 6.4% makes it a fine selection for any long-term investor interested in a low-volatility stock.
UnitedHealth Group (NYSE:UNH)
As the largest private health insurance provider in the U.S., UnitedHealth Group is a healthcare giant that has a lot to offer at this time. Since it plays a vital role in the healthcare industry and the lives of millions of health insurance policyholders all over the country, the company’s earnings are stable and have consistently grown over the years. UnitedHealth’s business has two main segments, UnitedHealthcare and Optum. The UnitedHealthcare business segment generates about 60% of the company’s revenue and offers medical benefits to over 50 million members at this time. Optum is focused on health care delivery, services, and optimization and includes OptumRx, a top three pharmacy benefit manager.
The great thing about this company’s business model is that UnitedHealthcare and Optum complement each other well, which allows the company to benefit from scale-related cost advantages. Dividend investors should also be interested in this Dow Jones stock, especially since it has a 10-year dividend growth rate of 28.1%. Q4 revenues for the company were up 8% year-over-year thanks to the strong growth in things like Optum Health and OptumRx. The bottom line here is the UnitedHealth is a low-beta stock that investors can count on to deliver steady growth over the years, which is a welcome quality to consider in the current market environment.
Not to be confused with the Dow Jones Industrial Index that it is a member of, Dow Inc is a chemicals company that has been one of the most impressive materials performers in 2021. The stock is up over 18.6% year-to-date and is worth a look for several reasons. As a global company that produces and distributes chemical products like polyolefins, chloralkali products, and coatings, Dow should benefit from strong demand in consumer packaging and construction end markets throughout the year. Construction projects should pick up with more infrastructure spending on the way as the economy rebounds, and the demand for durable goods could also benefit the company’s earnings going forward.
The stock currently offers a very attractive 4.5% dividend yield and Dow Inc is poised to put up strong sales numbers this year after dealing with a 10% decrease last year due to the pandemic. In Q4, the company reported net sales of $10.7 billion, a year-over-year increase of 5%. Dow Inc also saw its volume increase by 1% year-over-year in Q4, confirming that it has reached pre-pandemic levels in all operating segments. The materials sector has been very strong in 2021, and Dow Inc is one of the big reasons why.
Before you consider Coca-Cola, you'll want to hear this.
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