For Turbulent Markets, Seek Out Boring Companies

Market volatility is back. That means that companies can expect their share price to see sizeable swings by the day. As markets get turbulent, investors should look for companies that can continue to grow no matter what the economy does.

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  • Many gravitate towards income stocks. But a high payout along isn’t enough. Stability, rather than the potential for big growth, may win out in the market in the months ahead.

    That’s where a company like Honeywell International (HON) comes into play. As an industrial conglomerate, Honeywell has a number of businesses that tend to be slow and steady. Shares have pulled back slightly as the company looks to replace its CEO.

    The manufacturing firm has been a steady player, with revenues rising about 6 percent in the past year. And over time, it’s been a slow and steady player that’s performed well for shareholders, with the stock up nearly ten-fold in the past decade.

    Action to take: Given the pullback since the start of the year, shares now yield 2.1 percent. Honeywell has been a dividend grower, paying out about half of its earnings to shareholders.

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  • For traders, the June $200 calls last going for about $6.70, offer mid-double-digit returns in the months ahead as shares shake off the recent slump and move higher.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.