13 Aug 2019

Deprecated: get_the_author_ID is deprecated since version 2.8.0! Use get_the_author_meta('ID') instead. in /var/www/www.inovestor.com/wp-includes/functions.php on line 5211
admin

Number Cruncher Extra – Eighteen low volatility S&P 500 stocks capable of withstanding market shocks

13 Aug 2019

The unresolved and further complication of the Sino-U.S. trade dispute hit the markets once again last week, which I believe will cause higher volatility in the markets in the short run. On Friday, U.S. President Donald Trump confirmed that, for now, no business will be made with Chinese telecom giant, Huawei, and that he is not ready to finalize a trade deal with China. This follows China’s decision to stop purchasing American agricultural products. Therefore, for the Globe and Mail this week, we screened the U.S. market to identify companies with low volatility and sustainable operations that can withstand further potential market turmoil.

This strategy screens the S&P 500 using the following criteria:

  • A market capitalization of US$10-billion or more;
  • A beta of one or less. A stock with a beta less than one is considered less volatile than the market;
  • A five-year average return on capital (ROC) greater than or equal to 10 per cent, reported as of last quarter’s end, and a positive change in the 12-month return on capital figure;
  • A minimum free-cash-flow-to-capital ratio of 5 per cent. This ratio gives a sense of how well the company uses the invested capital to generate free cash flows, which could be used to do such things as stimulate growth, distribute or increase dividends, or reduce debt;
  • A positive 12-month change in the economic value-added (EVA) metric – a positive figure shows us that the company’s profit is increasing at a faster and greater pace than the costs of capital. The EVA is the economic profit generated by the company and is calculated as the net operating profit after tax minus capital expenses;
  • A cost of capital less than 10 per cent, reported as of last quarter’s end.
For subscribers to StockPointer, you can select the link below and adjust the screener to your liking.

Eighteen low volatility S&P 500 stocks capabl...

[vc_row type="in_container" full_screen_row_position="middle" scene_position="center" text_color="dark" text_align="left" overlay_...

Read more

Eight wealth-creating stocks in the U.S. real esta...

[vc_row type="in_container" full_screen_row_position="middle" scene_position="center" text_color="dark" text_align="left" overlay_...

Read more
Latest news

What’s in the news

Sep 08, 2021
Number Cruncher Extra - Pfizer, Watsco & PepsiCo
Read more
Aug 10, 2021
Number Cruncher Extra - Spin Master, Linamar & Sleep Country
Read more
Jul 13, 2021
Number Cruncher Extra – Netflix, Nike, Etsy & Amazon
Read more
Jun 15, 2021
Number Cruncher Extra - Stella-Jones, Alimentation Couche-Tard & Metro
Read more

Generate Higher Income

Discover our factor-based alpha generators

Discover our factor-based alpha generators

    What product(s) are you interested in?

    StockGuideMarket InsightsFor AdvisorsAsset Management

    StockGuide

    Market Insights

    For Advisors

    Asset Management

    What product(s) are you interested in?

    StockGuide
    Market Insights
    For Advisors
    Asset Management