The first half of 2022 was quite rough for the Wall Street participants. As of June 30, major market indices like the S&P 500 (SPX) and the Nasdaq Composite (NDX) were down 20.6% and 29.5%, respectively. In fact, the S&P 500 index has recorded the worst first half since 1970.
This is all being triggered by rising inflation levels in the U.S., which are at their 41-year high. Even though the Federal Reserve is seen taking a hawkish stance in its fight against inflation, fears of an impending recession seem to be plaguing the market sentiment.
Further, the ongoing Russia-Ukraine war, which has caused disruptions to the supply chain, is also adding fuel to inflation woes. With no immediate solution in sight, these factors are expected to keep clouding the investment world and add to market uncertainties.
Against this backdrop, although difficult, investors can still stay afloat in a highly volatile market and defensively position their portfolios for the remaining half of 2022. Using TipRanks, we have shortlisted two stocks from defensive sectors like healthcare and utility, which flaunt a strong upside potential and a beta of less than one.
AbbVie (NYSE:ABBV)
Abbvie is a U.S.-based pharmaceutical company, which commands a market cap of $271.78 billion. It holds a dominant position in immunology, oncology, hematologic, aesthetics, neuroscience and eye care. AbbVie’s acquisition of Allergan in May 2020 has helped it widen and diversify its portfolio offerings and strengthen future growth prospects.
On June 20, BMO Capital analyst Gary Nachman reiterated a Buy rating on Abbvie. The Street has a Moderate Buy consensus rating on the stock based on 10 Buys, 5 Hold and 1 Sell.
Abbvie’s average price target of $162.38 signals that the stock may surge nearly 5.58% from current levels. The stock has a beta of 0.87. Shares have gained 13.1% in the first half of 2022, against the broader healthcare sector’s decline of 8%.
TipRanks data shows that financial bloggers are 91% Bullish on Abbvie, compared to the sector average of 71%. Abbvie offers an attractive dividend yield of 3.52%.
Exxon Mobil (NYSE:XOM)
Exxon Mobil engages in the exploration, development, and distribution of oil, gas, and petroleum products. Upstream, Downstream and Chemical are the three main segments of the company. The energy company has a market capitalization of $368.81 billion.
On June 30, Morgan Stanley analyst Devin McDermott reiterated a Buy rating on XOM.
The Street has a Moderate Buy consensus rating on the stock based on 11 Buys and 4 Hold. Exxon Mobil’s average price forecast of $105 signals that the stock has upside potential of 19.9% from current levels. The stock has a low beta of 0.40. Shares have gained 37.8% in the first six months of 2022, which compares favorably with the broader utility sector’s gain of 1.4%.
TipRanks data shows that financial bloggers are 89% Bullish on Exxon Mobil, compared to the sector average of 72%. Exxon Mobil has a high dividend yield of 4.01%.
Key Takeaway
While Abbvie operates in a sector that is resilient to inflation, Exxon Mobil’s utility sector provides stability and strong dividends. Further, with a beta of less than one and dividend yield of more than 3%, the aforementioned stocks have the potential to give wings to your investment portfolio in the second half of 2022.
Read full Disclosure
