Top overweight and low-volatility picks in Staples, Healthcare, and Utilities – WF

Wells Fargo analyst Christopher P. Harvey put together a list of his top overweight-rated stocks with low volatility within consumer staples (NYSEARCA:XLP), health care (NYSEARCA:XLV), and utilities (NYSEARCA:XLU).

He said that utilities (XLU) is “an oversold hedge or risk aversion group at a healthy discount” and focuses on stocks tied to the artificial intelligence theme.

Risk-aversion sectors, such as utilities (XLU), staples (XLP), and health care (XLV), have outperformed heading into Fed accommodation periods with rate cuts.

Harvey said he believes this group will perform well into the September easing.

The median 12-month return for the 15 stocks selected is 17%, and the median forward P/E is 20x.

Within consumer staples (XLP):

• The Coca-Cola Co. (KO) – Forward P/E: 24x; 12-month return: 17.8%
• Procter & Gamble (PG) – Forward P/E: 24x; 12-month return: 12.3%
• Walmart Inc. (WMT) – Forward P/E: 28x; 12-month return: 31.6%
• Church & Dwight (CHD) – Forward P/E: 28x; 12-month return: 5.3%
• Mondelez International (MDLZ) – Forward P/E: 20x; 12-month return: -2%

Within health care (XLV):

• Regeneron Pharmaceuticals (REGN) – Forward P/E: 23x; 12-month return: 41.2%
• Abbott Labs (ABT) – Forward P/E: 23x; 12-month return: 5.6%
• Medtronic plc (MDT) – Forward P/E: 15x; 12-month return: 0.3%
• Elevance Health (ELV) – Forward P/E: 13x; 12-month return: 17%
• AbbVie Inc. (ABBV) – Forward P/E: 17x; 12-month return: 33.1%

Within utilities (XLU):

• Atmos Energy (ATO) – Forward P/E: 19x; 12-month return: 14%
• Duke Energy Corp. (DUK) – Forward P/E: 19x; 12-month return: 33%
• PPL Corp. (PPL) – Forward P/E: 18x; 12-month return: 22%
• Public Service Enterprise Group Inc. (PEG) – Forward P/E: 20x; 12-month return: 34.8%
• TXNM Energy, Inc. (TXNM) – Forward P/E: 14x; 12-month return: -1.2%