In this article, we will look at 5 safest stocks to invest in. If you want to explore similar safe investment options, you can also take a look at 10 Safest Stocks To Invest In.
5. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 72
Consumer spending on The Procter & Gamble Company’s (NYSE:PG) 65 individual industry-leading brands such as Pampers, Gillette, Head & Shoulders, Dawn, and Oral-B is expected to remain robust, regardless of inflationary periods and volatile market conditions. This makes The Procter & Gamble Company’s (NYSE:PG) rank high among the safest stocks to invest in now.
As of June 9, The Procter & Gamble Company (NYSE:PG) has returned 7.66% to investors over the past twelve months and has a forward dividend yield of 2.49%. The Procter & Gamble Company (NYSE:PG) is among the top-ranked dividend kings and has consistently hiked its dividends for 65 years, with a 5-year dividend CAGR of 5.48%.
On June 1, Deutsche Bank analyst Steve Powers trimmed his price target on The Procter & Gamble Company (NYSE:PG) to $171 from $177 but reiterated a Buy rating on the shares. Moreover, this May, Morgan Stanley named 15 stocks that can weather a bear market and The Procter & Gamble Company (NYSE:PG) was one of them.
According to Insider Monkey’s database, at the end of Q1 2022, 72 hedge funds were long The Procter & Gamble Company (NYSE:PG) with stakes totaling $6.06 billion. This is compared to 67 positions in the previous quarter with stakes of $6.61 billion.
As of March 31, GQG Partners is the dominating shareholder in The Procter & Gamble Company (NYSE:PG), owning over 9.91 million shares of the company which amounts to a stake value of $1.51 billion. The fund upped its prior stakes in The Procter & Gamble Company (NYSE:PG) by 32% in Q1 2022, and the investment covers 3.51% of its 13F portfolio.
4. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Johnson & Johnson (NYSE:JNJ) traces its roots back 130 years and has since been innovating and revolutionizing the healthcare industry. It is among the most premium healthcare brands in the industry and boasts a portfolio of over 100 brands. Johnson & Johnson (NYSE:JNJ) is also a prominent dividend king, having been consistent with growing its dividends for well above 50 years, making it one of the safest and most reliable bets for investors. As of June 9, Johnson & Johnson (NYSE:JNJ) has a forward dividend yield of 2.53% and boasts a 5-year CAGR of 5.87%.
Johnson & Johnson (NYSE:JNJ) is effectively working on beating cancer, and announced interim data for its oral cancer therapy, FGFR kinase inhibitor. The company reported that 29.2% of its 178 subjects with FGFR-driven solid tumors responded positively to the treatment and showcased reduced and deteriorated tumor cells. Moreover, the disease control rate for the study was reported to be 72.5%. The company’s efforts in the healthcare industry are unparalleled, making Johnson & Johnson (NYSE:JNJ) a leading pharmaceutical giant.
On May 23, SVB Leerink analyst David Risinger assumed coverage of Johnson & Johnson (NYSE:JNJ) with an Outperform rating and a $200 price target.
At the close of Q1 2022, 83 hedge funds held stakes in Johnson & Johnson (NYSE:JNJ). The total value of these stakes came in at $7.40 billion, up from $7.38 billion in the preceding quarter with 83 positions.
In the first quarter of 2022, Arrowstreet Capital raised its stakes in Johnson & Johnson (NYSE:JNJ) by 38%, bringing them to $1.17 billion. Arrowstreet Capital is the top shareholder in the company and the investment covers 1.47% of its 13F portfolio.
3. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 89
Union Pacific Corporation (NYSE:UNP) is a leading and one of the largest railroad companies in the world. The company operates North America’s premier railroad franchise, with 8,000 locomotives that cover 32,000-mile routes that span over 23 U.S. states west of Chicago and New Orleans. Railroads are one of the most lucrative industries in the United States, and Union Pacific Corporation (NYSE:UNP) is expected to sustain its profitability in the years to come due to its market-leading position, which makes it rank among the top five safest stocks to invest in now.
Another reason why Union Pacific Corporation (NYSE:UNP) might be a safe bet for investors is the company’s young, but strong, dividend history. Union Pacific Corporation (NYSE:UNP) has been consistent with growing its dividends for 6 years now and as of June 9, the stock has a forward dividend yield of 2.27% and a 5-year dividend growth rate of 14.87%.
As of this April, Goldman Sachs analyst Jordan Alliger has a $276 price target and a Buy rating on Union Pacific Corporation (NYSE:UNP).
Hedge funds are raising their stakes in Union Pacific Corporation (NYSE:UNP). At the end of Q1 2022, 89 hedge funds were bullish on Union Pacific Corporation (NYSE:UNP) with stakes worth $7.03 billion. This is compared to 59 positions in the prior quarter with stakes worth $5.64 billion. The hedge fund sentiment for the stock is positive.
As of March 31, TCI Fund Management is the most prominent shareholder in Union Pacific Corporation (NYSE:UNP) owning over 5.25 million shares of the company. The fund’s stakes in the railroad giant amounted to $1.43 billion, which covers 3.89% of its investment portfolio.
Here is what ClearBridge Investments had to say about Union Pacific Corporation (NYSE:UNP) in its “Global Infrastructure Value Strategy” fourth-quarter 2021 investor letter:
“On a regional basis, the U.S. and Canada was the top contributor to quarterly performance, of which U.S. rail operator Union Pacific was among the lead performers. Union Pacific is the largest listed railroad company in North America. With a rail network of over 32,000 route miles connecting Pacific Coast and Gulf Coast ports with the Midwest and Eastern U.S. gateways, its freight transportation services are crucial to the functioning of the U.S. economy.”
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 104
Investing in Berkshire Hathaway Inc. (NYSE:BRK-B) can be the same as investing in a high-quality ETF, simply because of the conglomerate’s investments in diverse sectors including retail, industrials, consumer staples, utilities, and real estate among others. A diverse portfolio is critical to risk management and maximizing returns, and legendary value investor and CEO of Berkshire Hathaway Inc. (NYSE:BRK-B), Warren Buffett is committed to driving shareholder returns.
Over the past 20 years, Berkshire Hathaway Inc. (NYSE:BRK-B) has returned a median of 10.3% per year on an annualized basis, outpacing the S&P 500’s comparable returns of 9.2% per year. Having a diversified portfolio of investments and a successful track record of returns makes Berkshire Hathaway Inc. (NYSE:BRK-B) one of the safest stocks to invest in now.
Berkshire Hathaway Inc. (NYSE:BRK-B) boasts a track record of reporting robust and strong financial results. On April 30, Berkshire Hathaway Inc. (NYSE:BRK-B) released earnings for the fiscal first quarter of 2022 in which it beat both EPS and revenue estimates. The company reported earnings per share of $3.18, beating estimates by $0.31. Berkshire Hathaway Inc. (NYSE:BRK-B) reported revenue of $70.81 billion for the quarter, up 9.61% year over year, outperforming Wall Street consensus by $1.66 billion. Moreover, as of June 9, Berkshire Hathaway Inc. (NYSE:BRK-B) has returned 6.99% to investors over the past twelve months.
At the end of the first quarter of 2022, 104 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B) worth $19.06 billion. This is compared to 108 positions in the previous quarter with stakes worth $19.31 billion. Of these, Bill & Melinda Gates Foundation Trust was the dominating shareholder in Berkshire Hathaway Inc. (NYSE:BRK-B) owning over 28.68 million shares of the conglomerate. The fund’s stakes were valued at $10.12 billion, which covers 51.22% of its 13F portfolio.
Black Bear Value Partners mentioned Berkshire Hathaway Inc. (NYSE:BRK-B) in its first-quarter 2022 investor letter. Here is what the firm said:
“Below is the rough Berkshire on-a-napkin valuation I like to do periodically. Recently BRK acquired Alleghany for $11.6BB. I assume a reduction in cash for this amount and an increase of $550MM in operating income. I do not give benefit to the increased float nor any synergies. Again, this is a rough exercise to sanity check our assumptions.
Cash of ~$103,000 per class A Share (vs. $104k 1 year ago)
-Down/Base/Up marks cash at book value to an 8% premium (vs. to 10% a year ago)
-Investments based on December prices ~$248,000 per class A share (vs. $194k a year ago)
Presume a range of stock prices that result in:
-Down = $149,000 per class A share (-40%- assumes portfolio is overpriced)
-Base = $211,000 per class A share (-15% – assumes portfolio is overpriced)
-Up = $285,000 per class A share (+15%)
Operating businesses that should generate ~$17,000 of pre-tax income per Class A share (vs. $15k)
-Down = 9x = $153,000 per share – equates to ~8% FCF yield
-Base = 12x = $204,000 – equates to ~6% FCF yield
-Up = 12x = $204,000 – equates to ~6% FCF yield
Overall (vs. $529,000 at quarter end)
-Down = $413,000 (-28%)
-Base = $526,000 (fairly priced)
-Up = $600,000 (13% underpriced)
Going forward I expect Berkshire to compound at good, not great returns. The likely question is why own it at all if we expect modest returns…
BRK is a collection of high-quality businesses, excellent management, and a good amount of optionality in their cash position. If the cash were to be deployed accretively the true value would be greater than an 8% premium (as mentioned above). The combination of a pie that is growing, an increasing share of said pie due to stock buybacks, upside optionality from cash and a tight range of likely business outcomes that span a variety of economic futures gives me comfort in continuing to own Berkshire.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 259
Microsoft Corporation (NASDAQ:MSFT) has established its position as a tech giant over the years of its operation. It is among the top-rated blue-chip stocks that guarantee returns and an inflation hedge. Microsoft Corporation (NASDAQ:MSFT) is one of the few technology stocks that has demonstrated strong financial performance over the past few years and continues to do so, owing to robust demand and preference for its products such as Azure. The company’s Azure platform and other cloud services recorded a 46% year-over-year increase in revenue in the company’s earnings release for the fiscal third quarter of 2022. Microsoft Corporation (NASDAQ:MSFT) also reportedly returned $12.4 billion to investors in the form of share repurchases and dividends in the fiscal third quarter of 2022, up 25% year over year. Solid balance sheets, its industry-leading position in the computing industry, and strong shareholder returns make Microsoft Corporation (NASDAQ:MSFT) one of the safest stocks to invest in.
On April 26, Microsoft Corporation (NASDAQ:MSFT) outperformed Wall Street consensus when it released earnings for the fiscal third quarter of 2022. The company reported earnings per share of $2.22, exceeding EPS estimates by $0.02. The company’s quarterly revenue came in at $49.36 billion, up 18.35% year over year, beating Wall Street estimates by $311.18 million.
Another factor that makes Microsoft Corporation (NASDAQ:MSFT) a safe investment option is the company’s dividend history. Microsoft Corporation (NASDAQ:MSFT) is a notable dividend player and has been growing its dividends for over 18 years now. As of June 9, Microsoft Corporation (NASDAQ:MSFT) has gained 6.63% over the past year and has a forward dividend yield of 0.91% with a 5-year dividend CAGR of 9.60%.
On June 2, Stifel analyst Brad Reback slashed his price target on Microsoft Corporation (NASDAQ:MSFT) to $320 from $350, while maintaining a Buy rating on the shares, noting secular tailwinds, solid execution, and a growing total addressable market driving the company’s growth.
At the close of Q1 2022, 259 hedge funds were long Microsoft Corporation (NASDAQ:MSFT) with stakes worth $65.63 billion in the company.
In the first quarter of 2022, Fisher Asset Management raised its stakes in Microsoft Corporation (NASDAQ:MSFT) by 4%, bringing them to $8.59 billion. Fisher Asset Management is the top shareholder in the company.
Polen Capital recently published its “Polen Global Growth Fund” first-quarter 2022 investor letter in which it mentioned Microsoft Corporation (NASDAQ:MSFT). Here is what the firm said:
“Microsoft’s business is firing on all cylinders and continue to enjoy an acceleration in their respective fundamentals because of the increase in digitization around the world. Nearly every company today is searching for ways to become more digital, and both Microsoft and Accenture are positioned to provide many of the solutions these companies seek. This inflection in fundamentals was not lost on the market, and each business’s stock performed exceptionally well in 2021. In fact, they represented two of the three top absolute performers for the Global Growth Portfolio last year. As a result, their respective stocks are currently more fully priced. As such, we lowered Microsoft from our largest position within the Portfolio. We maintain high conviction in Microsoft and plan to own it for many years, but recognize the increase in its prices.”
You can also take a look at 10 Stocks to Buy and Hold for Long Term According to Warren Buffett and 11 Best Stocks for Long Term Growth.
