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Chicago, IL – December 24, 2024 – Today, Zacks Investment Ideas feature highlights Exxon Mobil XOM, Philip Morris International PM and AT&T T.
You are viewing: Exxon Mobil, Philip Morris International and AT&T
Investors in the US stock market have enjoyed an excellent year of returns, but as the new year approaches it may be an opportunity to be tactically defensive. Among other catalysts, last week we saw a notable adjustment in the Fed’s rhetoric, shifting interest rate policy expectations and initiating a jump in volatility. While this is not a dire development, it is something to monitor as it changes investor expectations and reprices some assets.
Furthermore, we are seeing some signs of overly bullish sentiment, while the start of the year can bring some seasonal volatility and large portfolio rebalancing, adding another level of uncertainty. Because of these dynamics, investors who prefer to remain cautious may find solace in more defensive stocks.
Exxon Mobil, Philip Morris International and AT&T, while not particularly exciting names are three that should weather a period of higher volatility quite well. Their reasonable valuations, status as consumer staples and hefty dividend yields make them logical havens for investors seeking a safe hideout.
As a global leader in energy, Exxon Mobil benefits from steady demand and robust cash flow, even in uncertain markets. Its strong dividend yield of 3.8% provides an attractive income stream, while its diversified operations cushion the impact of short-term volatility.
Though its stock has not performed very well this year, as the price of crude oil has steadily fallen, the global economy remains very strong. This sturdy economy should provide continued demand for oil, while the price of the commodity appears to have found a floor. Today, Exxon Mobil trades at 13.3x forward earnings, which is below its 10-year median of 17.7x.
Philip Morris offers stability through its status as a consumer staple, with its products enjoying consistent demand. The company’s push into smokeless tobacco and heated products further diversifies its revenue streams and makes it a more appealing investment option for ethically concerned investors.
Philip Morris also pays a generous 4.4% dividend yield and is trading at 19.1x forward earnings, just above its 10-year median of 16.5x. After several years of stagnant earnings growth, PM’s transition to smokeless products has reignited its growth trajectory, with EPS projected to climb 8.3% this year and 10.6% next year.
See more : Most asset managers still rosy on sustainable investing
Source: https://magnacumlaude.store
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