Best Low-Beta Stocks to Own Right Away: FUTU, FET, DG & SKM

The U.S. stock market will remain volatile as investors are worried about who will lead the Federal Reserve. The possibility of a government shutdown is adding to the concerns.

Amid the increasing fears, one can also bet on low-beta stocks like Futu Holdings Limited FUTU, Forum Energy Technologies Inc FET, Dollar General Corporation DG and SK Telecom SKM.

What Does Beta of a Stock Measure?

Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.

If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.

For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.

Screening Criteria Using Research Wizard:

We have taken a beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters that can add value to the portfolio.

Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.

Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.

Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.

Zacks Rank Equal to 1: Zacks Rank #1 (Strong Buy) stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are four of the 23 stocks that qualified for the screening:

Futu Holdings

By employing fully digitalized financial services, Futu Holdings gives its clients a new essence of investing. It has been growing at a rapid pace since its clients are investing more money, reflecting the heightened trust of people, even from countries outside Hong Kong. This makes Futu Holdings a true global player.

Forum Energy Technologies

Forum Energy is well-positioned to capitalize on growing global energy demand, as it is a well-known provider of equipment and solutions to companies for finding and producing oil and natural gas. FET is strongly focused on reducing debt and strategic investments, while allocating a significant proportion of its free cash flow to strengthen its balance sheet and support long-term growth initiatives.

Dollar General

Dollar General is a well-known seller of everyday essentials at very affordable prices. While making shopping affordable and opening new stores, DG is well-positioned to grow at a steady pace and is likely to create long-term wealth for shareholders.

SK Telecom

SK Telecom is a leading provider of mobile services and is now employing AI at the core of its business. While focusing strongly on AI infrastructure, digital transformation and AI services, SKM is strongly positioned to create long-term value for shareholders.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research