Stock Analysis & Ideas

2 Low-Beta Dividend Stocks to Shield Your Portfolio from Volatility

Story Highlights

These low-beta stocks remain relatively immune to the heightened volatility in the broader market. These stocks offer a reliable dividend.

Even though inflation has shown signs of moderation, it remains high. Moreover, the U.S. Fed could continue increasing interest rates to further reduce inflation. This indicates that stocks could continue to be volatile in 2023. Amid volatility, low-beta stocks like AT&T (NYSE:T) and Walmart (NYSE:WMT) emerge as attractive investments to earn steady dividend income and add stability to the portfolio. 

Let’s delve into the details.

What Are Analysts Saying About AT&T Stock?

Analysts are cautiously optimistic about this diversified telecommunications company. As its services are deemed essential for the economy, its stock carries a low beta of 0.34. AT&T stock remains relatively immune to wild market swings thanks to its low beta and defensive business. 

For instance, AT&T stock remained mostly stable in 2022 and closed the year in the green (up 5.77%). The S&P 500 Index (SPX) declined more than 19%.

It continues to grow its subscriber base, which drives its revenues higher. Meanwhile, its focus on driving efficiency has helped the company save billions of dollars in costs, supporting earnings and its payouts.

Overall, the ongoing momentum in its Wireless and Broadband segment benefits from the 5G and fiber technologies, and cost-saving initiatives will likely cushion its earnings and drive future dividend payouts. Meanwhile, at current levels, AT&T stock offers an attractive dividend yield of 5.79% (forward yield). 

Five analysts have rated AT&T stock a Buy. Meanwhile, three analysts have a Hold, and one has a bearish outlook. Based on these recommendations, AT&T stock has a Moderate Buy consensus rating on TipRanks. Further, analysts’ average price target of $20.50 is in line with its closing price on January 25. 

Is Walmart a Good Company to Invest In?

Walmart is a solid stock for investors looking for stability and decent dividend income. Its wide range of consumable products and value pricing continue to drive traffic and its financials. Further, its low-risk business and value offerings add resiliency to its stock and position it well to perform well even in a challenging operating environment. Walmart’s stock carries a low beta of 0.61.

Walmart has increased its dividends for 49 consecutive years. Moreover, given its ability to drive sales and earnings, the retailer is likely to enhance its shareholders’ returns further through higher dividend payouts in the coming years. WMT stock offers a dividend yield of 1.57%, near current price levels.

Walmart stock sports a Strong Buy consensus rating on TipRanks, reflecting 21 Buy and five Hold recommendations. Meanwhile, the average price target of $162.32 implies 14.04% upside potential. 

Bottom Line

The low beta, defensive business, and ability to grow earnings make these companies a reliable investment amid volatility. These corporations are poised to perform well amid all market conditions and reduce the downside risk of your portfolio.


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