Over the last month, the FTSE 100 has fallen by 4.5%. This is a significant fall in a short period of time and shows that, while the global economy may be moving in the right direction, stock market corrections are a very real threat to investors.
Indeed, recent weeks have seen the FTSE 100 become much more volatile, with 50+ points being added/removed from the index on a daily basis.
With this in mind, here are three stocks that not only have bright futures and trade at attractive prices, but also offer relative stability during a highly uncertain period. As a result, they could beat the FTSE 100 moving forward.
One of the key attractions of Unilever (LSE: ULVR) (NYSE: UL.US) is its sheer diversity. Of course, thats not only in regard to its global footprint, with Unilever operating in all corners of the world, but also with a view to its wide range of brands.
Indeed, it sells all manner of consumer goods: from margarine to shampoo. As a result, it tends to offer relatively stable top- and bottom-line numbers that could prove to be major assets during uncertain economic periods.
Furthermore, Unilever has considerable growth potential. With around 60% of its revenue being derived from emerging markets, it should beat the index average when it comes to bottom line growth and, in addition, its current price to earnings (P/E) ratio of 19.8 is low by historical standards.
Clearly, the performance of a pharmaceutical company is less dependent upon the performance of the wider economy. So, its of little surprise that AstraZeneca (LSE: AZN) (NYSE: AZN.US) is classed as a defensive stock.
However, theres much more to the company than just a defensive play. Certainly, its pipeline has disappointed in recent years but, after numerous acquisitions, it now has huge potential. For example, the purchase of Bristol-Myers Squibbs share of the diabetes joint venture could prove to be a masterstroke as the number of diabetes cases worldwide is expected to increase at a rapid rate.
Despite this potential, AstraZeneca trades on a P/E ratio of just 16. While higher than the wider market, this valuation remains relatively attractive when compared to its sector rivals.
British American Tobacco
With tobacco sales being very consistent, British American Tobacco (LSE: BATS) is a great place to invest when the outlook is uncertain for the wider stock market. Indeed, with a beta of just 0.8, British American Tobacco should provide a relatively less volatile experience moving forward.
However, with considerable growth potential in its e-cigarette subsidiary, Nicoventures, British American Tobacco could prove to be more than just a defensive play. Furthermore, with a yield of 4.2% and a long track record of strong dividend growth, it could marry income and reliable growth to provide a potent combination.
Of course, British American Tobacco, Unilever and AstraZeneca aren’t the only companies that could beat the FTSE 100. So, which other shares should you buy, and why?
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Peter Stephens owns shares of AstraZeneca, British American Tobacco and Unilever. The Motley Fool UK owns shares of Unilever. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.