Recession fears and mixed earnings have brought a lot of uncertainty in the stock market right now. While inflation is cooling, there are looming concerns of a recession due to several geopolitical conflicts, and banking crises. However, not all is lost. This is a time to consider stocks that can bring stability to your portfolio. Safe stocks with defensive and recession-proof qualities are where you should consider putting your funds.
Here are the three safe stocks to buy in 2023 for investors who are looking for a flight to safety. These stocks will generate consistent dividends and also offer capital appreciation.
First on my list is Coca-Cola (NYSE:KO). One of the most safe stocks with strong fundamentals and dividends available today, KO stock is also a favorite of Warren Buffett. It is one stock you can buy and forget. Its brand has delivered massive value over the years and holds a dominant market position. Coca-Cola is already established in the market as one of the solid stock return generators and it is a cash-flow machine. It is one of the safe stocks to buy in 2023, trading at $63 today and could soon hit a new all-time high.
Coca-Cola recently reported earnings and beat expectations. The revenue hit $10.96 billion and EPS came in at 68 cents. Net sales increased to $10.98 billion and organic sales increased by 12%. The management hiked prices due to inflation and enjoyed higher growth due to higher demand. Analysts are bullish on the stock after the strong quarterly results. RBC Capital analyst Nik Modi has an “outperform” rating on the stock with a price target of $69. Evercore ISI analyst Robert Ottenstein also raised the price target to $70 and maintained an Outperform rating after what the firm calls an “encouraging and confident start to 2023.”
It is one of the best safe stocks for risk-averse investors that will thrive, no matter the market conditions. The company has gone out of its way to return large portions of the cash flow to investors in the form of dividends and buybacks which is why it is known as a dividend aristocrat. KO stock has a dividend yield of 2.8% and the future outlook remains strong.
Microsoft (NASDAQ:MSFT) is a dinosaur when it comes to the tech space. The company has a solid reputation in the industry and an impressive portfolio of businesses that not only bring stability to the current environment but also make MSFT stock one of the safe stocks to buy in 2023 and hold forever. The company has a diversified business that continues to generate revenue, no matter the market conditions. Right from Office365 to its search engine Bing, there is a lot to look forward to when it comes to Microsoft’s business.
Its cloud segment, Azure is making big moves and offers an ideal option for businesses to do more at a lower cost. One of the safe stocks with low volatility and high stability, MSFT stock is trading at $275 today and is up 14% year to date. The stock hasn’t gone below $214 in the past year and has generated 187% returns in the past five years. That said, the company enjoys a dividend yield of 0.99% and recently announced a dividend of $0.68.
The tech giant is sitting on strong financials which makes it possible for strategic investments in AI. Microsoft recently reported quarterly results and beat estimates. It surpassed expectations on top and bottom lines and reported an EPS of $2.45 per share. Its profit grew 9% to $18.3 billion and the revenue increased by 7% to $52.9 billion. The company has had a great start to the year driven by cloud computing and artificial intelligence segments. The long-term outlook is incredibly bright for the computing giant and I believe this is the stock to buy and hold for decades.
A household name and a tech giant, Apple (NASDAQ:AAPL) is certainly one of the top stocks to buy if you are looking for a flight to safety. The company held up well even during the massive tech selloff last year. AAPL stock changes hands today at $163, much lower than the all-time high of $183. The iPhone maker has made a strong comeback since the beginning of the year and is inching closer to its all-time high. It remains one of the top blue-chip stocks to own and hold.
One solid reason to bet on Apple is its technology innovation. The company is constantly working to bring new products and services to the market and holds a loyal customer base. If someone is using an iPhone, they rarely would be willing to switch to a different phone maker and the loyal customer base benefits the company. With a market cap of $2.65 trillion, AAPL stock has gained 34% since the beginning of 2023. It is the brand that sells and is a powerhouse that constantly introduces new models that attract consumers and grow revenue. Its products are highly addictive and compelling for anyone to ignore.
Fundamentally, Apple has a strong balance sheet that shows double-digit revenue growth. It is showing strong growth in the services unit and I believe the momentum will continue throughout the year. No matter how the market turns from here, Apple stock is a great and very safe addition to your portfolio. The company is set to report second-quarter results on May 4.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.