10 Most Stable Companies In The US

Which are the most stable companies in the US?

Given all that can happen around the world such as interest rate hikes, economic recessions, and natural disasters, the future is not set in stone. A lot can happen that can cause profits at companies to go down. Competitors can appear. Supply can exceed demand. CEOs can make bad acquisitions. If profits shrink, stock prices can shrink too. Given the unknowable nature of future profit streams, equities have proven more volatile than bonds in the past, which makes finding some of the most stable companies in the U.S an important buffer for your portfolio.

Yet while many equities are volatile, some companies are stabler than others. Those companies are what you might call ‘Warren Buffett‘-type corporations that have wide moats and strong balance sheets. Some like AT&T Inc. (NYSE:T), Johnson & Johnson (NYSE:JNJ), Procter & Gamble Co (NYSE:PG), and The Coca-Cola Co (NYSE:KO) have been around for a long time. Other companies, such as Kraft Heinz Co (NASDAQ:KHC), Mondelez International Inc (NASDAQ:MDLZ) and PepsiCo, Inc. (NYSE:PEP) have substantial goodwill with customer bases and operate in stable sectors. While the average consumer might postpone buying a big ticket item such as a car or washer during uncertain times, he/she will likely continue eating Oreo cookies and drinking Mountain Dew. Others, such as Verizon Communications Inc. (NYSE:VZ), Visa Inc (NYSE:V), and Mastercard Inc (NYSE:MA) have very substantial barriers to entry. Financial transaction networks have strong network effects while competitors to Verizon will need to spend tens of billions on spectrum licenses and infrastructure just to compete.

Not surprisingly, all of the most stable companies pay a dividend. Some, such as AT&T Inc. (T)’s dividend (currently at 4.6%), outpace the dividend payouts of others in the pack. Many stable companies are Dividend Aristocrats, companies that have paid an increasing annual dividend for 25 consecutive years or more. Those include Procter & Gamble Co (PG), The Coca-Cola Co (KO), PepsiCo Inc. (PEP), and AT&T Inc. (T). Due to their more stable nature, the stocks of said companies have generally been less volatile than the market, and in many instances have outperformed the market over time (and especially during recessions).

While buying stocks of stable companies isn’t a way to get rich fast, purchasing a basket of shares of the most stable companies in the U.S has historically been a way to keep wealth and steadily add to it. With all that said, let’s take a closer look at the 10 most stable companies in the United States. For more reading on recession proof ideas, check out 11 Recession-Proof Businesses You Can Start Now. Let’s see our list of most stable companies in the US.

Kraft Heinz Co (NASDAQ:KHC)

Kraft Heinz Co (NASDAQ:KHC), next in line on our list of  most stable companies in the US is a major conglomerate in the uber-stable consumer staples sector. Just some of the company’s brands include JELL-O, Oscar Mayer, Lunchables, and Planters. The company and Oprah Winfrey recently announced a venture to create a line of healthy and nutritious foods for everyone. 10% of the profits of the venture will be given to charities to solve world hunger. Buffett’s Berkshire Hathaway owned over 325 million shares of Kraft Heinz Co (NASDAQ:KHC) at the end of September, good for 22.63% of the Oracle of Omaha’s 13F portfolio at the time.

Mondelez International Inc (NASDAQ:MDLZ)

We are continuing our list of most stable companies in the US with the Kraft Foods spin-off Mondelez International Inc (NASDAQ:MDLZ) that is also a consumer staple, with well-known brands including Oreo, Chips Ahoy, Trident, and Triscuit. Although the stock has been relatively flat year-to-date, Mondelez International Inc (NASDAQ:MDLZ) pays an attractive 1.72% dividend yield. Fintan Ryan of Berneberg has a ‘Buy’ rating and a $51.15 price target on the stock.

AT&T Inc. (NYSE:T)

Given its diversified nature and the enormous barriers to entry for potential telecom competitors, AT&T Inc. (NYSE:T), one of the  most stable companies in the US, has a very wide moat. The stock also pays an attractive yield of 4.67% at current prices, and trades for just 14.22 times forward-earnings estimates. Although detractors will point to AT&T Inc. (NYSE:T)’s rather large debt load, the company has bounced back from its November lows and reported in-line adjusted EPS for its fourth quarter.

Verizon Communications Inc. (NYSE:VZ)

Like its larger brethren AT&T, Verizon Communications Inc. (NYSE:VZ) has a very wide moat. Seeing as how hard it is to build something to scale that could compete against AT&T and Verizon profitably, Verizon earns duopoly-like profits. Given how essential internet, data, and phone is for Americans, demand for Verizon Communications Inc. (NYSE:VZ)’s services is unlikely to change much during a recession. That makes Verizon’s 4.66% dividend yield relatively secure.

Visa Inc (NYSE:V)

Although technology has disrupted many industries such as print media and taxis, many investors still regard Visa Inc (NYSE:V) as a rock-solid company. Not only is Visa Inc (NYSE:V) accepted almost everywhere that matters, the company’s cards are also used by a large segment of the U.S. population every week. Visa also has a great brand, and has rallied by 7.37% year-to-date.

Mastercard Inc (NYSE:MA)

Although Bitcoin could be a long-term threat, Mastercard Inc (NYSE:MA) is still regarded as a core financial holding for many. Like Visa, Mastercard is also accepted almost everywhere that matters. Its cards are also used by tens of millions of Americans each week. Moshe Katri of Wedbush has a $126 price target on the stock, noting that Mastercard Inc (NYSE:MA) has attractive growth prospects and a solid outlook for potentially increasing shareholder returns.

Johnson & Johnson (NYSE:JNJ)

Consumer healthcare giant Johnson & Johnson (NYSE:JNJ), next on our list of  most stable companies in the US, is the gold standard among dividend aristocrats. Not only has Johnson & Johnson (NYSE:JNJ) increased its dividend for 54-straight years, but the company’s dividend also amounts to a rather attractive yield of 2.82%. With a forward P/E of 15.94, the stock isn’t particularly risky if management continues to execute and doesn’t make any bad major acquisitions, which is why it has found its place on this list of most stable companies in the US.

Procter & Gamble Co (NYSE:PG)

With around $70 billion in annual sales, operations in around 180 countries, and a business history spanning 178 years, Procter & Gamble Co (NYSE:PG) is as stable a consumer conglomerate as they come. While the strong dollar may still present challenges, Procter & Gamble Co (NYSE:PG)’s greater than 3% dividend yield and its 60-year history of raising its dividend payout arguably makes up for most of the risk.

The Coca-Cola Co (NYSE:KO)

While carbonated beverages aren’t necessarily the healthiest liquids out there, The Coca-Cola Co (NYSE:KO), one of the  most stable companies in the US, is still doing well. Consumer spending habits change slowly over time, and the company has diversified into other categories through acquisitions and organic initiatives. The Coca-Cola Co (NYSE:KO) currently trades for 21-times forward earnings estimates and pays a yield of 3.38%.

PepsiCo, Inc. (NYSE:PEP)

Like Coca-Cola, PepsiCo, Inc. (NYSE:PEP) also has an admirably stable business. Once the average consumer develops the habit of buying a Pepsi, he is unlikely to change his behavior. As a bonus, PepsiCo, Inc. (NYSE:PEP) is more diversified than Coca-Cola given the company’s potato chips business.

Thus completes the list of the 10 most stable companies in the US. Do you expect any of these companies to meet some expected turbulence? Are other companies more stable? Let us know in the comments.

Disclosure: None