LONDON — I’ve trawled the market to find the shares that have previously been least affected by big market rises or falls. Statistically, these are referred to as low-beta shares. This means that the wider market has less influence on their share-price movement than most others. If this continues in the future, these shares should be safe havens during a market panic.
National Grid plc (ADR) (NYSE:NGG)
As a provider of vital energy infrastructure, National Grid plc (ADR) (NYSE:NGG)‘s services are some of the least discretionary offered by any company in the FTSE 100. This makes their profits and earnings reliable and their shares steady.
Despite all of this, the shares have risen 18.9% in 2013. Shares in the company now stand within touching distance of a 10-year high.
National Grid plc (ADR) (NYSE:NGG) is forecast to increase its dividend again this year. A 5.3% increase is expected, pushing the yield for the year to 4.5%. Another similar rise is being penciled in next year, meaning that the shares trade on a prospective yield for 2014 of 4.7%.
A big earnings per share (EPS) increase is forecast for 2013. That puts the shares on a 2013 price-to-earnings (P/E) ratio of 15.1, a small premium to the rest of the market.
The porfolio of top-brand must-have domestic products gives Reckitt Benckiser Group Plc (LON:RB) pricing power and visibility of earnings. This has led to the company becoming one of the FTSE 100’s most successful.
Reckitt Benckiser Group Plc (LON:RB) has a 10-year record of successive dividend increases. In the last five years, that dividend has been increased by an average of 19.5% per annum. EPS has increased in that time at an average rate of 16.4% a year. As a result of this consistent success, the shares today stand close to an all-time high.
Reckitt Benckiser Group Plc (LON:RB) shares trade on a 2013 P/E of 18.1, falling to 17.3 times the 2014 forecast. The forecast yield for this year is 2.9%, rising to 3% next year.
On May 7, G4S plc (LON:GFS) announced that, although sales were ahead, operating margins had fallen.
This news forced analysts to reduce their profit forecasts for the company by around 10%.
Some positive remain. G4S plc (LON:GFS) is a big, successful, and diverse company. It has a customer list of the very highest-quality customers — frequently governments. A large proportion of G4S plc (LON:GFS)’s revenues will be tied to long-term contracts. This brings a high degree of certainty to future profits.