Hate Risk? You’ll Love These 3 Stocks

These three stocks are about as safe as it gets.

You’re likely aware that stocks tend to be more volatile than other asset classes. That simple fact keeps many from putting money to work in the the stock market, which is a shame because stocks offer investors the best long-term returns.

So what can you do if you’re interested in the stock market, but have a lower-than-average risk tolerance? The simple answer is to buy the lowest-risk stocks that you can find.

With that in mind, below is a list of three stocks that I think are about as safe as it gets.

A healthcare conglomerate

Nobody is able to choose when they get sick, which keeps the demand for high-quality healthcare products up no matter what’s going on in the economy. That fact makes the healthcare giant Johnson & Johnson (NYSE:JNJ) one of the most reliable investments in the entire market.

Screen Shot


To demonstrate just how dependable this company’s business is, consider this unbelievable fact: Johnson & Johnson has increased its adjusted earnings for 32 consecutive years. The company’s track record of dividend increases is even more impressive, stretching out over the last 54 years.

So how has this company made itself so reliable? The secret is that J&J is very diversified. The company owns over 250 operating companies that are broken out into three major divisions: pharmaceutical, medical device, and consumer health products. These businesses sell countless individual products in 60 countries worldwide, with roughly 50% of sales taking places outside of the U.S. This setup ensures that the top and bottom lines continually move in the right direction, even if a handful of products or individual countries are struggling.

Of course, the market is aware of this company’s reliability and has priced shares accordingly. It could be argued that at roughly 22 times earnings, J&J’s stock is fairly valued given its single-digit growth prospects. I’d agree with that assessment, but if your goal is to minimize risk, then J&J’s stock is still a great choice.

A telecom titan

It’s no stretch to say that consumers have become addicted to their cellphones. That fact has greatly benefited Verizon Communications (NYSE:VZ), the nation’s largest wireless provider.

As a testament to just how loyal cellphone users have become, consider this: The postpaid churn rate among the big four telecom providers is consistently below 2%. That’s unbelievably good, and yet this is an area in which Verizon, in particular, excels. Last quarter, Verizon’s postpaid churn rate was an industry-leading 0.94%, which says a lot about the kind of brand loyalty that this company has created.



It’s not hard to figure out why Verizon’s customers are so loyal. The company has spent billions on advertising to convince consumers that its network is the biggest and most reliable in the country. When you look at the results, that looks like it was money well spent.

Of course, the wireless industry in the U.S. is very mature, so while Verizon is an extremely stable business, it’s unlikely to put up big growth numbers anytime soon. Still, with a trailing P/E ratio under 15 and a dividend yield of 4.5%, any investor who hates risk should learn to love this stock.

Ride the coattails of the world’s greatest investor

The final stock on today’s list is the house that Buffett built, Berkshire Hathaway(NYSE:BRK-A)(NYSE:BRK-B).

It’s not easy to classify Berkshire as an investment, as the company has its hands in so many different parts of the economy. Berkshire owns a collection of more than 50 businesses, many of which you’re undoubtedly familiar with. Ever insured your car with GEICO? Purchased a garment made by Fruit of the Loom? Bought paint from Benjamin Moore? Visited a Dairy Queen? Each of these businesses count themselves as part of the Berkshire empire.

Beyond its operating companies, Berkshire also owns a massive collection of publicly traded stocks. The company is best known for its huge ownership position in stalwarts like Wells Fargo, Coca-Cola, American Express, and IBM, but it also holds a position in a variety of other publicly traded companies.

In total, buying Berkshire Hathaway’s stock is akin to buying a massively diversified mutual fund with the greatest investment manager ever at the helm. That makes this a wonderful choice for low-risk investors.

Buffett himself has stated that the best way to value Berkshire is to use the price-to-book ratio. He has even gone a step further by stating that Berkshire would be a repurchaser of its own shares at 1.2 times book value — a price at which Buffett sees the stock as meaningfully undervalued. With Berkshire currently trading for just under 1.4 times book value, I’d argue that now is as good of a time as any to accumulate shares.

If you own Johnson and Johnson, you should pay attention
You see, our co-founders just released a proprietary list of the 10 stocks they believe are the best buys on the stock market today. I just finished reviewing this list and Johnson and Johnson wasn’t on it.

If you own Johnson and Johnson, or you’re even considering buying it, you need to see this list of 10 stocks for yourself.

Simply click here to learn how you can gain instant access to this list.

Brian Feroldi owns shares of Wells Fargo. Brian Feroldi has the following options: long January 2017 $195 calls on IBM, short January 2017 $195 puts on IBM, short January 2017 $190 puts on IBM, long January 2018 $175 calls on IBM, and short January 2018 $175 puts on IBM. Like this article? Follow him on Twitter where he goes by the handle @Longtermmindset or connect with him on LinkedIn to see more articles like this.

The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Johnson and Johnson, Verizon Communications, and Wells Fargo. The Motley Fool has the following options: short October 2016 $50 calls on Wells Fargo. The Motley Fool recommends American Express and Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


You May Also Like

NAIOP South Florida Appoints Officers, Executive Board and Board of Directors for 2022

NAIOP South Florida, a Commercial Real Estate Development Association offering advocacy, education and business opportunities to its members, has announced the following officers for the 2022 Board of Directors: President:

Pride Week Festival Begins With Tribute to Pulse Nightclub Survivor

Miami Beach Pride’s week-long festivities will commence with a special tribute to the LGBTQ+ community honoring the victims of the tragic shooting at Pulse Nightclub in Orlando. A ceremonial “flip

Surfside luxury condo sees notable sales

Arte at Surfside is making waves. There’s, of course, the news that Ivanka Trump and Jared Kushner are renting at the 16-resident luxury condominium. And there’s the December penthouse sale

Up in the Air: A Discussion

In a dynamic region where residents are typically on the move, everyone is wondering about the health of the airline industry and the safety of airports and airplanes. Everyone is

Other Posts

South Florida Yachting Legend Passes

Robert “Bob” Roscioli, an icon in the South Florida marine industry, has passed away. Many recognize the name Roscioli from the widely-successful and world-renowned Roscioli Yachting Center, a full service

Four key steps

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] What a crazy time we are all experiencing. Right now, getting back to basics is most important. It is not and

Pandemic adds to worries about hurricane season

An above-normal 2020 Atlantic hurricane season is expected, according to forecasters with NOAA’s Climate Prediction Center, a division of the National Weather Service. The outlook predicts a 60% chance of

The difference between leading and managing

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] Leadership and management are often misunderstood as one in the same. They are not. Certainly, a good leader should be able

Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.