Exxon Mobil Corporation (XOM), PepsiCo, Inc. (PEP): Fed Sees Risk Fears Lingering, Buy What You Know

The stock’s beta is only 0.3 or so. If the market were to fall 10%, PepsiCo, Inc. (NYSE:PEP) stock would be expected to fall around 3%. The ease of keeping tabs on PepsiCo, a low beta, and a regularly increased dividend make this a good company for fearful investors to own.

Cereal Giant and More

Kellogg Company (NYSE:K) is also a food company that requires little more than your weekly shopping trip to monitor. However, like PepsiCo, Inc. (NYSE:PEP), Kellogg offers much than just one product. It also sells crackers and other salty snacks. Some of its brands, outside of the cereal aisle, include Keebler, Pringles, Pop-Tarts, and Cheez-its.

The company’s top line pulled back in 2009 and 2010, but has since recovered to new highs. Earnings had been moving higher until last year, when margin compression led to a notable drop. That said, often volatile commodity prices can have a big impact on costs, so this isn’t surprising. Eventually, costs get passed on to customers.

The dividend, meanwhile, has been increased annually since 2004. The stock recently yielded around 2.8%, like the others here, and has a beta of around 0.4. Kellogg Company (NYSE:K) shares haven’t offered investors the same upside as PepsiCo, Inc. (NYSE:PEP) over time, but it has charted a steadily higher course.

Buy What You Know

Investors got far too complacent during the tech bubble and the housing bubble. That said, stock prices are again hovering around all-time highs. So a little bit of fear is probably a good thing in the current environment. However, avoiding stocks altogether is a mistake.

If you are afraid to invest, start small and focus on names you know, and maybe even love. PepsiCo, Inc. (NYSE:PEP) and Kellogg Company (NYSE:K) offer household products that you probably use every week. Exxon Mobil Corporation (NYSE:XOM) gas stations, meanwhile, are on street corners across the country. With as little as $70, including commissions, you can start by buying a share of Kellogg Company (NYSE:K).

Reuben Brewer has no position in any stocks mentioned. The Motley Fool recommends PepsiCo. The Motley Fool owns shares of PepsiCo, Inc. (NYSE:PEP).

The article Fed Sees Risk Fears Lingering, Buy What You Know originally appeared on Fool.com.

Reuben is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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