Americans are fast losing confidence as the nation’s economic health continues to raise concerns. A tightening labor market, coupled with high prices, has already led to a decline in consumer confidence over the past few months.
This could see consumers start spending more cautiously. Additionally, geopolitical tensions have further exacerbated concerns. Markets remained volatile for most of January, and this could continue for a prolonged period.
Given this situation, investors may want to focus on low-beta, defensive stocks — especially from the utility, healthcare and consumer staples sectors — to help cushion against market swings. Our picks from such stocks are Ameren Corporation AEE, Fortis, Inc. FTS, Cardinal Health, Inc. CAH and J&J Snack Foods Corp. JJSF. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
These stocks are also from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank.
The Conference Board said last week that consumer confidence dropped to 84.5 in January, a decline of 9.7 points from the previous month, hitting a 12-year low. Economists had expected the consumer confidence to fall to 90.9.
The decline came as consumers became less confident about the economy’s health and a struggling labor market. The report also mentioned that the percentage of consumers who said jobs were “plentiful” declined to 23.9%. This is the lowest level since February 2021. Also, 20.8% of respondents said jobs were “hard to find,” the highest since February 2021.
The labor market has been struggling since the second quarter of 2025, with the unemployment rate little changed at 4.4% in December. However, low consumer confidence hints at the unemployment rate climbing further in January.
Trump’s aggressive immigration and trade policies have been creating an imbalance in the demand and supply of the labor force. Also, businesses are unsure about the staff strength they need, given the role that artificial intelligence is playing in replacing humans.
The Federal Reserve also left interest rates unchanged in its January policy meeting as high inflation continues to pose a challenge. Investors are still unclear about the Federal Reserve’s near-term monetary policy.
Ameren Corporation is a utility company that generates and distributes electricity and natural gas to residential, commercial, industrial and wholesale end markets in Missouri and Illinois. AEE serves nearly 2.4 million electric and more than 900,000 natural gas customers.
Ameren Corporation’s expected earnings growth rate for the current year is 8.2%. The Zacks Consensus Estimate for current-year earnings improved 0.2% over the past 60 days. AEE currently carries a Zacks Rank #2. Ameren Corporation has a beta of 0.57 and a current dividend yield of 2.75%.
Fortis, Inc. is engaged in the electric and gas utility business. FTS offers regulated utilities comprising electric and gas, as well as engages in non-regulated hydroelectric operations. Fortis operates primarily in Canada, the United States and the Caribbean.
Fortis has an expected earnings growth rate of 5.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.6% over the last 60 days. FTS currently carries a Zacks Rank #2. Fortis has a beta of 0.50 and a current dividend yield of 3.42%.
Cardinal Health, Inc. is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution, and Other growth businesses. CAH serves nearly 90% of U.S. hospitals, delivers more than 43,000 pharmaceutical shipments daily, and manages a broad portfolio of medical, surgical, and laboratory products.
Cardinal Health has an expected earnings growth rate of 21.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. CAH currently carries a Zacks Rank #2. Cardinal Health has a beta of 0.64 and a current dividend yield of 0.95%.
J&J Snack Foods is an American manufacturer, marketer and distributor of branded niche snack foods and frozen beverages for the food service and retail supermarket industries. Manufactured and distributed nationwide, JJSF’s principal products include SUPERPRETZEL, BAVARIAN BAKERY and other soft pretzels, ICEE and SLUSH PUPPIE frozen beverages, LUIGI’S, MINUTE MAID frozen juice bars and ices, WHOLE FRUIT sorbet and frozen fruit bars.
J&J Snack Foods’ expected earnings growth rate for the current year is 4.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the past 60 days. JJSF currently carries a Zacks Rank #2. J&J Snack Foodshas a beta of 0.34 and a current dividend yield of 3.37%.
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Ameren Corporation (AEE) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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