Investors are looking for stable opportunities as the US economy is showing signs of slowing down, as evidenced by recent job data that falls short of expectations.
David Kostin is the Chief US Equity Strategist of Goldman Sachs. According to him, it could be important to shift focus to stocks that are resilient.
Here are three stocks with the potential to perform well in a downturn.
F5 Inc (NASDAQ: FFIV)
F5 is currently down 6.0% from its high for the year.
Kostin, a Goldman Sachs analyst, wrote in a report that the recent weakness is an opportunity to build up a position in stable growth names. These names may outperform a slowing economic environment.
F5 Inc.’s 10-year EBITDA Growth Variability is higher than its peers, at 16 percentage points.
The cloud security company’s shares may be a good investment for the second half of 2024, as its management cited AI tailwinds when it issued better than expected guidance for the fourth quarter of financial year in late July.
Domino’s Pizza Inc (NYSE: DPZ)
Goldman Sachs’ strategist David Kostin expects Domino’s Pizza will also offer stable growth during a slowing economic environment.
As of writing, the 10-year EBITDA variability of the Michigan-based chain of pizza restaurants is estimated at 7 percentage points. The consensus is that DPZ will grow its revenue by 7%, and its EPS by even more than 10% in the current financial year.
Russell Weiner, the CEO of Domino’s, said to Jim Cramer on Mad Money last month that “value has never before been higher”. He also revealed an increase in orders. Weiner also predicted continued strength for his company’s US operations at the time.
The current dividend yield on Domino’s stock is 1.38%. This is another reason to include it in your portfolio.
Zoetis Inc. (NYSE: ZTS).
The investment firm recommends that you own Zoetis to prepare for a possible economic slowdown in the United States.
In August, the company that produces pet vaccines and medicines surpassed revenue estimates for its second quarter and increased its full-year forecast for the same metric.
ZTS is still down more than 5,0% since the beginning of 2024. This makes it a more attractive investment.
The New York-listed company saw “impressive growth in global operations” in both companion animals and livestock businesses during its latest reported quarter.
This post Top 3 Stocks to Consider During a Slowing US Economy may be modified based on new developments.
