These three S&P/ASX 200 stocks could be safe as houses.
In fact, if you weigh up the performance of the housing market as compared to the stock market over a period of time, they might even be safer.
Investors are always looking for “safe haven” stock market picks, and when the ripple effect of the Banking Royal Commission takes hold, those who haven’t already, will be reassessing how safe their dollars are in the big four and their associated sectors.
If I had to name three of the safest haven stocks on the S&P/ASX 200 today, these would be my pick.
Woolworths Group Ltd (ASX: WOW)
Shares in Woolworths Group have seen better days in the last 12 months, with its share price down to $28.24 at the time of writing after a fairly steady few months of decline since July.
Some believe the current low puts Woolworths in the buy zone and I’m not far off agreeing.
We are unlikely to get too close to the mid-June lows of 2016, so anywhere under $25 is historically quite a good buy-in point for Woolworths.
Woolworths is best known for its supermarkets, liquor chain, retailer Big W and petrol businesses, but the latter could be sold off sometime soon as management seeks out buyers for its petrol segment.
The underlying theme is, Woolworths operates comfortably in the necessity space, with all of us unable to live without food, most of us reliant on petrol and many of us partial to a spot of shopping at the likes of Big W and some vinos from the liquor store.
Investors are likely still smarting from the failure of the Masters chain, but let’s face it, it would take some sort of magnificent point of difference in the trade sector to knock Wesfarmers Ltd’s (ASX: WES) Bunnings from its pedestal.
Speaking of Wesfarmers, this diversified supermarket and necessity retailer is another potential “safe haven” bet.
But if you’re looking for upside, there is probably more available in Woolworths right now, although the competition both Woolworths and Wesfarmers are facing from the likes of Aldi, Costco and the upcoming Lidl is very real and worth serious consideration, not to mention the threats posed by online giant Amazon.
If you’re not keen on Woolworths of Wesfarmers as buy and hold “safe stocks” but you’re keen on the sector, you could turn your attention to the more speculative growth share Metcash Limited (ASX: MTS) perhaps.
Either way, do your due diligence, time your buy-in the best you can and prepare for an out if your growth expectations are not met over a decent period of time.
CSL Limited (ASX: CSL)
Global biotechnology company CSL Limited ticks a lot of boxes when it comes to trying to find a “blue chip” long-term investment opportunity you can count on.
If you take a look at its 10-year share price chart, its August 31 high of $227.31 was certainly historical, so does this mean its current drop to $185.02 signals a buy?
There’s a lot of prior consideration that will go into putting your hard earned money into a share this expensive per piece, so don’t rush on that one.
But CSL’s name certainly gets bandied around as a safe haven stock more often than not, with its recent post-earnings slump enough for many to consider staging their buy-in about now, especially given the company’s strong growth prospects over the next decade as its business grows at the core.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
You’re going to be hard-pressed to name another S&P/ASX 200 stock that has managed to increase its dividend every single year since 2000 aside from investment house Washington H. Soul Pattinson and Co. Ltd.
Soul Patts isn’t perfect by any means, but it shows continued strength across market dips, historically, and keeping its shareholders well looked after in a maintainable manner is its strength.
With a grossed dividend yield of 2.85%, Soul Patts is certainly offering better bang for your buck than most bank accounts, and it’s got a track record of adapting to changing conditions in the market and moving along with the times.
Soul Patts shares are going for $28.40 right now and while down from its 52-week high of $30.51 earlier this month, it’s probably kicked back up out of buy territory for the time being.
You have to keep a keen eye on this one if you want to get in at the right time.
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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.