In the aftermath of last year’s bear market, 2023 is seeing a robust recovery in the stock market.
This is primarily being lead by tech stocks on the Nasdaq, especially those linked to the field of artificial intelligence (AI).
There is also optimism building around the belief that the aggressive interest rate hikes from the US Federal Reserve might be near its end.
Despite that, it is essential to acknowledge that risks still persist, with China’s sluggish economic growth, the looming shadow of a global recession, and ongoing geopolitical concerns.
Keeping this backdrop in mind, I present five top stocks for June 2023 that could act as a safe harbour for investors during potential rough market conditions.
1. Procter & Gamble
A household name in the consumer goods industry is Procter & Gamble Co (NYSE: PG), universally known as P&G. The company boasts a diverse portfolio of products that grace homes worldwide.
Even amid economic downturns, the company guarantees a consistent revenue stream due to the necessity of its goods.
With a commendable record of paying and raising dividends, P&G presents a dependable income source for investors.
A crucial observation from their April earnings report was the company’s strong pricing power, which has been retained despite challenging market conditions.
2. TSMC
As one of the globe’s leading microchip producers, Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM) (TPE: 2330), or simply known as TSMC, offers an attractive value play, currently trading more than 15% below its 52-week high and well beneath its 2022 peak.
The company’s attractive current price-to-earnings ratio coupled with a projected sales growth of 15.9% next year makes it an enticing pick.
The long-term growth of the company also remains strong given the shift towards digitalisation and the rise of AI.
3. Visa
Visa Inc (NYSE: V) is the largest payments processor in the world and is likely to benefit from the shift towards a cashless world.
In the recent quarter, Visa reported revenue of US$7.98 billion, an increase of 11%, earning US$2.09 per share.
The company saw a 10% rise in payment volume year-over-year, with 7% growth in services revenue.
The firm’s earnings growth is likely to be supported by the recovery in travel spending.
With our society increasingly going cashless, we are likely to see a continued rise in credit card sales.
Since Visa takes a percentage of every transaction, the company also has a natural hedge against inflation.
4. Apple
Apple Inc (NASDAQ: AAPL) is one of the most valuable and innovative companies in the world, with a loyal customer base and a strong brand image.
Backed by a well-fortified ecosystem, Apple has maintained strong customer loyalty.
The company’s foray into the Indian market, coupled with the rising contribution from its services sector, is poised to bolster its growth trajectory.
Adding to its attractiveness as a sound investment choice, Apple’s financial health remains remarkably strong.
As of Q1 FY2023, Apple reported a significant cash reserve, including cash equivalents and marketable securities, totalling an impressive US$165 billion.
After adjusting for long-term debt, Apple’s net cash stands at US$54 billion.
Moreover, Apple’s robust annual free cash flow of approximately US$100 billion will support its dividend payments and share repurchases, aligning with the management’s goal of achieving cash neutrality.
5. Walmart
The appeal of Walmart Inc (NYSE: WMT) as the world’s largest retailer extends across various economic strata, thanks to its wide range of affordable products.
Walmart’s robust dividend growth history, defensive business model, and consistent earnings make it a resilient investment option during any economic climate.
Invest in companies that offer growth and resilience
In a world marked by persistent market volatility and economic uncertainty, P&G, TSMC, Visa, Apple, and Walmart, represent compelling investment opportunities, each with its unique strengths and factors of resilience.
These companies offer investors a healthy blend of reliability and growth potential, making them suitable for any portfolio seeking to weather the fluctuating tides of the market.
However, as always, investors should carefully consider their risk tolerance and investment goals before making any investment decisions.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
