In this article, we will be taking a look at 13 safe stocks to invest in.

The Federal Reserve’s July interest rate hike of 25 basis points that came on July 26 has brought inflation in the US up to levels of 5.25% to 5.5%. This is the highest inflation levels have been in the US in over 22 years, making the markets and investors worry about what more may lie ahead for them. Recession fears continue to plague the markets, with many investors worrying for their portfolios and rushing to pile their money into what is known as “safe stocks,” that is, those stocks that manage to stay in the green despite overall market conditions being far from ideal.

What To Focus On After The Rate Hike

While traditionally, the sectors that have managed to perform well in colder market conditions have included those like consumer staples, utilities, and healthcare, another trend we are seeing this year is an ongoing tech rally led primarily by large-cap tech companies such as Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG). There are many reasons for this development, which include the rampant popularity of artificial intelligence for one. Considering this, investors should rest assured that while inflation may still be running high, they are not suffering from any lack of safe haven stocks that are continuing to battle on in a challenging financial environment.

Stock performance in these sectors is also not the only thing to count on at this moment. After the Fed’s decision to hike interest rates yet again, Jerome Powell, the Chairman of the Federal Reserve, also noted in a following press conference that the Fed will do everything in its power to bring inflation down again. Here are some comments Powell made at this press conference:

“We’re of course very focused on rates and our own policy. We’re going to use our policy tools to get inflation under control. The implication is, you know, we will do what it takes to get inflation down. In principle, that could mean that if financial conditions get looser we have to do more. But what tends to happen though is that financial conditions get in and out of alignment with what we’re doing and ultimately over time, we get where we need to go.”

The Fed’s Commitment To Lowering Inflation

In a statement at the beginning of this press conference, Powell noted that the Fed remains committed to its long-term goal of bringing inflation down to 2%. While he did not offer any definitive statement on whether the markets should expect to see further rate hikes ahead in the year, he did note that US policymakers will be taking a “meeting by meeting” approach toward interest rates moving forward. All in all, Powell’s statement and the following press conference indicate that while inflation is not expected to go down any time soon, the Fed is doing its utmost to bring it back down to more optimistic levels.

In the meantime, investors are advised to focus their savings on safer options, such as high-risk, low-volatility stocks that have consistently performed well over the past few years. These include many large-cap companies that have made it to our list below and notably also include tech companies that have seemingly become more defensive investment options in 2023 in light of a sustained tech rally all through 2023. Names like the ones below can be considered to be safe stocks to buy for beginners in particular, and they most certainly are some of the top low-risk stocks to buy in the market this year. As such, our list below may act as a helpful guide for beginner investors looking for some of the most stable stocks out there today.

Our Methodology

We have selected stocks from sectors like consumer staples, healthcare, and technology since these sectors have proven to be safe historically and in 2023. They are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest number, by using Insider Monkey’s first-quarter hedge fund data.

Safe Stocks To Invest In

13. The Hershey Company (NYSE:HSY)

Number of Hedge Fund Holders: 44

The Hershey Company (NYSE:HSY) shares were upgraded from Neutral to Outperform by Max Gumport, an analyst at Exane BNP Paribas, on July 19. The analyst also announced a price target of $268 on the stock.

The Hershey Company (NYSE:HSY) is a consumer staples company that engages in the manufacture and sale of confectionery products and pantry items internationally. The company is based in Hershey, Pennsylvania.

There were 44 hedge funds long The Hershey Company (NYSE:HSY) in the first quarter, with a total stake value of $1.9 billion.

Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), The Hershey Company (NYSE:HSY) is an immensely safe stock many hedge funds are piling into this year.

12. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 61

The Coca-Cola Company (NYSE:KO) is a beverage company operating in the consumer staples sector. It sells non-alcoholic beverages under the Coca-Cola, Fanta Orange, and Diet Coke brands, among more. It is based in Atlanta, Georgia.

An Overweight rating was reiterated on shares of The Coca-Cola Company (NYSE:KO) on July 27 by Dara Mohsenian, an analyst at Morgan Stanley. The analyst also maintains a price target of $70 on the stock.

The Coca-Cola Company (NYSE:KO) was spotted in the 13F holdings of 61 hedge funds at the end of the first quarter. Their total stake value in the company was $27.5 billion.

11. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 65

Bailard Inc held the most shares in The Home Depot, Inc. (NYSE:HD) at the end of the first quarter, amounting to 79,348 shares.

Chris Graja, an analyst at Argus Research, maintains a Buy rating on shares of The Home Depot, Inc. (NYSE:HD) as of July 26. Graja also placed a price target of $350 on the shares.

The Home Depot, Inc. (NYSE:HD) is a home improvement retail company based in Atlanta, Georgia. It sells building materials, home improvement products, lawn and garden products, and more.

Our hedge fund data shows 65 hedge funds holding stakes in The Home Depot, Inc. (NYSE:HD) in the first quarter, with a total stake value of 2.1 billion.

Madison Investments made the following comment about The Home Depot, Inc. (NYSE:HD) in its second-quarter 2023 investor letter:

“The Home Depot, Inc. (NYSE:HD) celebrates 30 years of giving back. Team Depot was created in 1993 as a way of organizing associates who were eager to volunteer in their communities. For 30 years, Team Depot associates have worked side by side with non-profits around the United States. Focus areas include spending time with the elderly and activities with at risk youth. Team Depot also improves the homes and lives of veterans and helps communities impacted by natural disasters.

During the quarter, Home Depot set a goal for battery-powered products to represent over 85% of outdoor lawn equipment sales in the U.S. and Canada by the end of fiscal 2028. Push lawn mowers and handheld leaf blowers and trimmers will run on rechargeable battery technology instead of gas. This will reduce 2 million metric tons of greenhouse gas emissions annually.”

10. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 70

PepsiCo, Inc. (NASDAQ:PEP) was seen in the portfolios of 70 hedge funds at the end of the first quarter. Their total stake value in the company was $4 billion.

PepsiCo, Inc. (NASDAQ:PEP) is another consumer staples company on our list that markets and sells beverages and convenient foods internationally. It is based in Purchase, New York.

John Staszak at Argus Research maintains a Buy rating on shares of PepsiCo, Inc. (NASDAQ:PEP) as of July 14. The analyst also raised his price target on the stock from $193 to $195.

9. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 75

The Procter & Gamble Company (NYSE:PG) is a provider of branded consumer packaged goods in the consumer staples sector. It offers hair care products, personal care products, and more. The company is based in Cincinnati, Ohio.

A total of 75 hedge funds held stakes in The Procter & Gamble Company (NYSE:PG) during the first quarter, with a total stake value of $4.7 billion.

Morgan Stanley analyst Dara Mohsenian reiterated an Overweight rating on shares of The Procter & Gamble Company (NYSE:PG) on July 25, alongside a price target of $174.

Bailard Inc was the most prominent shareholder in The Procter & Gamble Company (NYSE:PG) at the end of the first quarter, holding 151,031 shares in the company.

8. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 75

As of July 20, Robyn Karnauskas, an analyst at Truist Securities, maintains a Buy rating on shares of Merck & Co., Inc. (NYSE:MRK). The analyst also placed a price target of $116 on the stock.

We saw 75 hedge funds long Merck & Co., Inc. (NYSE:MRK) at the end of the first quarter, with a total stake value of $3.7 billion.

Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical company operating internationally. It works through its Pharmaceutical and Animal Health segments. The company is based in Rahway, New Jersey.

Baron Funds said the following about Merck & Co., Inc. (NYSE:MRK) in its second-quarter 2023 investor letter:

“During the second quarter, Merck & Co., Inc. (NYSE:MRK) filed the first lawsuit (followed by the filing of additional lawsuits by other parties) against the federal government challenging the constitutionality of the Medicare Drug Price Negotiation Program (the Program) that Congress established as part of the Inflation Reduction Act. In Merck’s complaint, Merck argues that the Program violates the Fifth Amendment because it allows the federal government to take Merck’s innovative drugs without providing just compensation for them. In addition, Merck argues the Program violates the First Amendment because it forces them to sign an agreement saying the government mandated prices are fair and the result of a negotiation when in fact, Merck argues, prices are not negotiated or fair. These lawsuits will take time to work their way through the legal process and in the meantime, the Program moves ahead on its scheduled path. The consensus view is that these lawsuits will not be successful, and the Program will remain in place. We suspect Merck’s arguments may convince at least a few U.S. Supreme Court Justices when the case reaches the U.S. Supreme Court, but the ultimate outcome is impossible to predict. For now, we assume the Program will remain in place and invest with that framework in mind.”

7. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 86

Bailard Inc was the largest shareholder in Johnson & Johnson (NYSE:JNJ) at the end of the first quarter, holding 133,081 shares in the company.

Johnson & Johnson (NYSE:JNJ) is another healthcare company on our list. It is based in New Brunswick, New Jersey. The company researches, develops, manufactures, and sells various healthcare and pharmaceutical products, including skin health and beauty products.

An Outperform rating was maintained on shares of Johnson & Johnson (NYSE:JNJ) by Jayson Bedford, an analyst at Raymond James, on July 24. The analyst also raised his price target on the stock from $181 to $184.

In total, 86 hedge funds were long Johnson & Johnson (NYSE:JNJ) in the first quarter. Their total stake value in the company was $4.5 billion.

6. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 91

Walmart Inc. (NYSE:WMT) is a retail and wholesale company operating in the consumer staples sector. It manages supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores. The company is based in Bentonville, Arkansas.

Edward Yruma, an analyst at Piper Sandler, upgraded shares of Johnson & Johnson (NYSE:JNJ) from Neutral to Overweight on July 25. The analyst also announced a price target of $210 on the stock.

In the first quarter, 91 hedge funds held stakes in Walmart Inc. (NYSE:WMT), with a total stake value of $5.7 billion.

Like Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOG), Walmart Inc. (NYSE:WMT) is a stock that is highly popular among elite hedge funds today.

5. UnitedHealth Group Inc. (NYSE:UNH)

Number of Hedge Fund Holders: 116

UnitedHealth Group Inc. (NYSE:UNH) is a diversified healthcare company offering health benefit plans, healthcare coverage, and other services. It is based in Minnetonka, Minnesota.

Bernstein analyst Lance Wilkes upgraded UnitedHealth Group Inc. (NYSE:UNH) shares from Market Perform to Outperform on July 18 while raising the firm’s price target on the stock from $595 to $603.

UnitedHealth Group Inc. (NYSE:UNH) was seen in the portfolios of 116 hedge funds in the first quarter, with a total stake value of $11.7 billion.

L1 Capital made the following comments about UnitedHealth Group Inc. (NYSE:UNH) in its second-quarter 2023 investor letter:

“Close observers of the Fund will note the increased exposure to healthcare, currently 13% of the portfolio. Healthcare is generally less macro-sensitive than some other sectors. In a reversal of market sentiment compared to 2022, the healthcare sector has been under modest pressure due to what we consider to be some short-term transitory issues, while technology, particularly anything to do with AI, has become the market’s dish du jour. We have been selectively increasing our investment in a few very high-quality healthcare businesses at prices we consider to be fair. UnitedHealth Group Incorporated (NYSE:UNH) is now a top 10 holding, and our investment thesis is outlined in this report.

We have previously written on our exposure to taxes through our investment in Intuit and its market leading TurboTax franchise (Intuit also owns the QuickBooks small business accounting franchise, Credit Karma and Mailchimp). UnitedHealth Group (UnitedHealth) is leading the charge to postpone the inevitable, while lowering overall healthcare system costs.

U.S. health spending has outpaced GDP growth for decades, with spending on healthcare increasing from around 12% of GDP in the 1980s to nearly 20% today, driven by advancements in healthcare capabilities and an ageing population with increased life expectancy…” (Click here to read the full text)

4. Apple Inc.  (NASDAQ:AAPL)

Number of Hedge Fund Holders: 131

Erik Woodring at Morgan Stanley holds an Overweight rating and a $220 price target on Apple Inc. (NASDAQ:AAPL) as of July 25.

Apple Inc. (NASDAQ:AAPL) is an information technology company manufacturing and marketing smartphones, laptops, tablets, and more. It is based in Cupertino, California.

There were 131 hedge funds long Apple Inc. (NASDAQ:AAPL) in the first quarter, with a total stake value of $165.2 billion.

Wedgewood Partners said the following about Apple Inc. (NASDAQ:AAPL) in its second-quarter 2023 investor letter:

“Apple Inc. (NASDAQ:AAPL) contributed to positive performance during the quarter despite declining revenues and operating earnings mostly driven by difficult comparisons in its Mac segment. iPhone sales grew as supply chain bottlenecks seem to be in the rearview mirror, with component prices falling. The Company also highlighted the torrid growth of its App Store ecosystem, which saw over $1.1 trillion in billings on the platform during 2022, more than double the billings in 2019. Apple has tremendous leverage across the mobile economy due to the App Store’s mission-critical relevance to both developers and users. We continue to hold Apple as a top weighting in the portfolio because this asset-light ecosystem drives sustainably high returns on invested capital.

In January 2007 Steve Jobs introduced the iPhone at Macworld in San Francisco. At the time of that momentous day, Jobs had not planned for third-party developers to build native software applications (apps) for the iPhone’s internal operating software (iOS). However, later that year, bowing to considerable pressure from the developer community, Jobs relented. When the second-generation iPhone (3G) was released in the summer of 2008, Apple announced the opening of the iPhone App Store at the same time. According to the Company in July 2009, after just the first 12 months since the launch of the App Store, 1.5 billion apps were downloaded from 65,000 apps from more than 100,000 developers from 77 countries.

That early symbiotic relationship between the iPhone (hardware) and the App Store (software) completely redefined the utility of the iPhone (think Intel and Microsoft). Too bad American Express coined the phrase, “Don’t Leave Home Without It.” That perfectly describes the utility of the modern iPhone. Heck, for years now, most of us won’t walk from the kitchen to the garage without it…” (Click here to read the full text)

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 155

Alphabet Inc. (NASDAQ:GOOG) was spotted in the 13F holdings of 155 hedge funds in the first quarter. Their total stake value was $18.6 billion.

Alphabet Inc. (NASDAQ:GOOG) is an interactive media and services company and is one of the big tech companies in the market. It is based in Mountain View, California.

An Outperform rating was maintained on Alphabet Inc. (NASDAQ:GOOG) shares on July 13 by John Blackledge at TD Cowen, alongside a price target of $140.

Wedgewood Partners said this about Alphabet Inc. (NASDAQ:GOOG) in its second-quarter 2023 investor letter:

“Alphabet Inc. (NASDAQ:GOOG) was also a top contributor to performance as revenues returned to year-over-year growth after a brief period of post-pandemic advertising spending digestion. The Company’s Cloud division also turned a small profit on a roughly $30 billion revenue run-rate. The Company’s internal engineering prowess should continue to drive longer hardware useful life and better profitability for this unit over time. Alphabet and its Google subsidiary have been pioneers in AI development, creating some of the most important software and hardware specifications and standards that developers rely on today. Alphabet should be able to continue to capitalize on its long-term AI investments by rolling out product improvements for users and advertisers featuring more automation that can deliver better returns.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 243

Amazon.com, Inc. (NASDAQ:AMZN) is another big tech company on our list, offering an online retail platform alongside physical stores, among more. It is based in Seattle, Washington.

A total of 243 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN) in the first quarter, with a total stake value of $25.8 billion.

JMP Securities analyst Nicholas Jones reiterated a Market Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) shares, alongside a $140 price target, on July 18.

Here’s what The Ithaka Group said about Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2023 investor letter:

“Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) has evolved from its early roots as an online bookstore to become one of the world’s largest eCommerce retailers. At the end of 2022 Amazon stood poised to capture ~40% of all US e-commerce sales, representing five times more share than the next closest competitor. In addition to eCommerce, Amazon Web Services (“AWS”) has become the market leader in outsourced cloud infrastructure. Further, Amazon Advertising is garnering significant share in digital advertising, particularly product placement ads, thanks to consumers beginning their product searches on Amazon’s site. Despite providing tepid forward guidance on its 1Q23 earnings call, Amazon’s stock appreciated on the back of increased confidence the company would be able to contain expenses and push operating margins above prior peaks in the near-to medium term.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 289

A Buy rating and a $360 price target were maintained on Microsoft Corporation (NASDAQ:MSFT) shares on July 27 by Blair Abernethy at Rosenblatt.

Microsoft Corporation (NASDAQ:MSFT) is another information technology company on our list. It develops, licenses, and supports software, services, devices, and solutions. It is based in Redmond, Washington.

Microsoft Corporation (NASDAQ:MSFT) had 289 hedge funds long its stock in the first quarter. Their total stake value was $57.9 billion.

This is what The Ithaka Group said about Microsoft Corporation (NASDAQ:MSFT) in its second-quarter 2023 investor letter:

“Microsoft Corporation (NASDAQ:MSFT) builds best-in-class platforms and provides services that help drive small business productivity, large business competitiveness, and public-sector efficiency. Microsoft’s products include operating systems, cross-device productivity applications, server applications, software development tools, video games, and business-solution applications. The company also designs, manufactures, and sells devices, including PCs, tablets, and gaming/entertainment consoles that all integrate with Azure, its cloud computing service. In the quarter Microsoft’s stock appreciated on the back of excitement surrounding the company’s positioning in the generative AI market and its ability to monetize the coming wave of corporate investment in supercomputing and AI.”

See also Starter Stock Portfolio: 15 Safe Stocks To Buy and 20 Countries With Lowest Inflation Rates In The World.

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Disclosure: None. 13 Safe Stocks To Invest In is originally published on Insider Monkey.