In the ever-shifting landscape of the stock market, where do you turn when the ground beneath seems to quake with uncertainty? Picture a moment when share prices broadly nosedive, setting off a frenzied alarm on Wall Street. That’s the harsh reality of a market crash. In such volatile times, smart stock selection becomes paramount.
This is where a ready wish list of reliable stocks becomes invaluable — companies like Coca-Cola (NYSE: KO) and McDonald’s (NYSE: MCD) that offer stability even during economic turmoil.
Conversely, Global-e Online (NASDAQ: GLBE) emerges as a more turbulent player, potentially rocked by the market’s seismic shifts.
Wish List: Coca-Cola delivers a refreshing staple in turbulent times
Coca-Cola is an investment powerhouse with a fizz felt in every corner of the globe. This beverage behemoth quenches investors’ desire for stability with operations spanning over 200 countries. In the roller coaster of the third quarter, Coca-Cola poured out an impressive 8% surge in net revenues to a refreshing $12 billion, demonstrating not just a spike but a steady climb in its financial performance.
The company is also a leader in dividends — those regular payouts that sweeten your investment pot. Since 1963, it’s been boosting its dividend annually. At its recent share prices, its last distribution of $0.46 per share gives it an annualized yield of approximately 3.1%, providing a steady stream to enrich your investment pool, which will be especially appealing when the markets turn rough.
However, Coca-Cola navigates a maze of fierce rivals, ever-changing consumer preferences, and intricate global supply chains. It remains on top largely through its proven ability to adapt, its extensive network, and a knack for striking a chord with consumers across the globe. For investors seeking a mix of enduring value and growth prospects, Coca-Cola’s global influence and robust financial health present a refreshing wish list option even in times of market uncertainty.
Wish list: McDonald’s continues serving up consistent growth
McDonald’s is a global institution where billions dine, recognizable by its iconic golden arches. This culinary titan nourishes investor portfolios as well as customers across more than 100 nations. The figures tell a mouthwatering story: an 8.8% jump in global comparable sales and an 11% increase in systemwide sales in the most recent quarter alone, showcasing its prowess in delivering consistent growth, even when economic situations change.
Its “Accelerating the Arches” strategy showcases a commitment to evolving with the times, enhancing customer experiences, and bolstering its bottom line through smart tech, menu refreshes, and modernizing its spaces. The result is a hearty $1.67 per share dividend and a 2.3% forward dividend yield, serving up a slice of profit to its shareholders.
McDonald’s still navigates a labyrinth of evolving palates and cutthroat competition. But its global footprint and an ability to adapt to changing demands make it proficient at reinventing itself. From tailoring menus to reflect local tastes to embracing digital innovation for smoother service, McDonald’s has mastered the art of turning potential pitfalls into opportunities for growth. When market clouds gather, McDonald’s will stand as a champion of enduring performance and strategic foresight, a culinary kingpin offering a recipe for stability and growth amid the financial tempest.
Forget: Global-e’s high risk keeps it off the wish list
Global-e, a trailblazer in the cross-border e-commerce landscape, has charted impressive growth while transforming the way online retailers reach international markets. The third quarter witnessed a notable 35% year-over-year increase in gross merchandise volume alongside a 27% revenue jump, signaling Global-e’s robust position in the burgeoning e-commerce industry.
Yet the allure of Global-e’s rapid ascent is tempered by the specter of higher risk, which would become particularly noticeable if the markets waver. Its forward price-to-earnings ratio, perched at an elevated 45.9, is a premium valuation, placing it in a precarious position when markets are skittish. Furthermore, its beta of 1.16 reveals a greater susceptibility to market gyrations, with Global-e’s share price on average experiencing swings that are 16% more pronounced than the broader market, a matter of concern amid financial turbulence.
Global-e’s operational model, centered on enabling global e-commerce, navigates the labyrinth of international trade laws, shifting regulatory landscapes, and consumer sentiment that can swiftly change with economic tides. In the event of a market downturn, these challenges likely become magnified, potentially constraining Global-e’s operations as consumer spending contracts and regulatory hurdles mount. With its future tethered to the relentless pace of e-commerce innovation and an arena rife with fierce competition and regulatory complexities, Global-e’s journey is one of high potential yet equally high risk. For investors, this juxtaposition of opportunity and vulnerability warrants a cautious approach, especially as storm clouds gather on the economic horizon.
Strategic picks are paramount in uncertain times
Savvy investors know the importance of a well-curated wish list. Coca-Cola and McDonald’s, with their legacies of resilience and growth, are stalwarts you’d want in your portfolio when financial tremors start. Conversely, Global-e, despite its commendable trajectory in the e-commerce sector, might not make the cut for your wish list. As enticing as its recent growth might be, the heightened risk it carries suggests it might be wise to exit when the economic skies darken.
As you weigh your options, remember, investing isn’t just about picking stocks; it’s about crafting a strategy that weathers all seasons, including preparing for a market crash. Coca-Cola and McDonald’s, with their blends of stability and adaptability, make prime candidates for your wish list, promising not just survival but potential growth, or at least likely dividends, in a downturn. Meanwhile, approach Global-e with a discerning eye, recognizing that its high-risk profile might not be suited for all, especially when the financial forecast calls for a storm.
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Nicholas Robbins has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Global-e Online. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.
2 Stocks to Add to Your Wish List for the Next Market Crash and 1 to Forget was originally published by The Motley Fool
