2 of the Safest Stocks to Buy in 2023

The Fed is expected to hike rates further in 2023. According to Bankrate’s Fourth-Quarter Economic Indicator poll, the Fed will likely take rates to a target range of 5.25-5.5%. However, the rate hike aggression is expected to cool down as inflation shows signs of slowing.

Nonetheless, experts still anticipate a recession later this year, which should keep the market under pressure. Marko Kolanovic, Chief Global Markets Strategist, Co-Head of Global Research J.P. Morgan, believes market volatility will be one of the predominant factors in 2023.

Therefore, we believe fundamentally solid stocks, The Procter & Gamble Company (PG) and Humana Inc. (HUM), which pay dividends, could be safe investments now. Investors’ interest in dividend-paying stocks is evident from the SPDR S&P Dividend ETF’s (SDY) 12.6% gains over the past three months.  

The Procter & Gamble Company (PG)

PG provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care.

On October 19, 2022, Jon Moeller, Chairman of the Board, President, and CEO, said, “We remain committed to our integrated strategies of a focused product portfolio, superiority, productivity, constructive disruption and an agile and accountable organization structure.” 

PG has paid dividends for 66 consecutive years. Its dividend payouts have increased at 6.9% CAGR over the past three years. Its current dividend yield is 2.40%, while its four-year average yield is 2.45%.

For its quarter that ended September 30, 2022, PG’s net sales came in at $20.61 billion, up marginally year-over-year. Its total current assets came in at $22.52 billion for the period ended September 30, 2022, compared to $21.65 billion for the period ended June 30, 2022.

PG’s revenue is expected to increase by 3.7% year-over-year to $82.85 billion in 2024. Its EPS is expected to increase 7.2% year-over-year to $6.26 in 2024. It surpassed EPS estimates in three of four trailing quarters. Over the past three months, the stock has gained 22.4% to close the last trading session at $152.04. It has a beta of 0.43.

PG’s POWR Ratings reflect its promising outlook. It has an overall B rating representing a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

PG has an A for Stability and a B for Sentiment and Quality. It is ranked #14 out of 59 stocks in the Consumer Goods industry. For additional PG ratings (Growth, Value, and Momentum), click here.

Humana Inc. (HUM)

HUM and its subsidiaries operate as a health and well-being company in the United States. It operates through three segments: Retail; Group and Specialty; and Healthcare Services.

HUM has paid dividends for ten consecutive years. Its dividend payouts have increased by 12.7% CAGR over the past three years. Its current dividend yields 0.65%. 

On November 2, 2022, Bruce D. Broussard, HUM’s President and CEO, said, “We have achieved industry leading Stars scores for the 5th year in a row enhancing our ability to offer comprehensive and affordable benefits. Taken together, our plan designs and operating performance reinforce our confidence in achieving our new 2025 Adjusted EPS target of $37.”

HUM’s total revenues came in at $22.80 billion for the third quarter that ended September 30, 2022, up 8% year-over-year. Its cash and cash equivalents came in at $13.56 billion for the period ended September 30, 2022, compared to $3.39 billion for the period ended December 31, 2021.

For 2023, HUM’s revenue is expected to increase 9.2% year-over-year to $101.59 billion. Its EPS is expected to rise 11.8% year-over-year to $28.01 in 2023. It surpassed EPS estimates in all four trailing quarters. Over the past year, the stock has gained 32.6% to close the last trading session at $481.71. It has a beta of 0.74.

HUM has an overall A rating, equating to a Strong Buy in our proprietary rating system. In addition, it has a B grade for Growth, Value, and Quality.

HUM is ranked #3 out of 11 stocks in the A-rated Medical – Health Insurance industry. Click here for the additional POWR Ratings for HUM (Momentum, Stability, and Sentiment).

PG shares were trading at $151.95 per share on Tuesday afternoon, down $0.09 (-0.06%). Year-to-date, PG has gained 0.26%, versus a 1.77% rise in the benchmark S&P 500 index during the same period.

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.

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