The U.S. housing market looks to be on shaky ground. Lofty mortgage rates have set a high bar for first-time buyers to enter the housing market, with many consumers finding it difficult to qualify for a mortgage as rates are currently near 7%. At the same time, a lack of housing supply across America has pushed home prices to near-record levels. The National Association of Realtors (NAR) reports that the median price of a home in the U.S. of $384,500 seen in February of this year is not far from the all-time-high of $413,800.
The current situation has economists and investors asking aloud if the housing market is due to crash as it did in 2008/09, causing the Great Recession? While the current consensus view seems to be that real estate stocks can continue to hold up, many market observers are watching the real estate sector like hawks for any signs of cracks in the industry’s foundation. In such an uncertain environment, investors may want to look for stability in safe haven equities. Here is housing crisis havens: three stocks to shelter your wealth.
Coca-Cola (KO)
Few stocks are as reliably safe as Coca-Cola (NYSE:KO). The beverage giant’s stock is so stable that it’s been compared to a bond. Few market events or economic shocks can shake the share price, which has hovered around $60 since before the Covid-19 pandemic struck in March 2020. So far this year, KO stock is completely flat (down less than 1%). The lack of volatility is one of the things that makes Coca-Cola’s stock so appealing, especially to investors who are living in retirement.
The other nice feature of KO stock is the dividend payment. Coca-Cola currently pays a quarterly dividend of 48 cents, which is good for a yield of 3.27%. Investors can count on the company to raise its dividend payout each year. In February, Coke increased its dividend to shareholders by 5.4%. It marked the 62nd year in a row that Coca-Cola has increased its dividend payment, placing it in a select group of companies that have boosted their payouts to stockholders for 60 years or more.
Costco (COST)
Whether the housing market holds up or not, people will still shop at Costco (NASDAQ:COST). The low prices and bulk sizes make shopping at Costco a priority for consumers. The company’s membership renewal rate each year is above 90%, among the highest in the retail sector. Good economic times or bad, people rely on the products and prices they get from Costco. And that has made COST stock a rock solid investment. In the last five years, COST stock has nearly tripled. Already in 2024, the share price is up 10%.
Like Coca-Cola, Costco is known for its dividend payments to shareholders. The warehouse club currently pays a dividend of $1.02 per share, for a yield of 0.57%. However, investors also recognize Costco for making special dividend payments on occasion. Most recently, the company paid a special cash dividend of $15 per share on Jan. 12 of this year. The special dividends are one way that Costco rewards its shareholders. The company supports the dividend payments with strong earnings and continued growth.
GE Aerospace (GE)
Now that it has successfully split into three separate publicly traded companies, GE Aerospace (NYSE:GE), which retains the company’s original industrial business and ticker symbol, looks like a safe bet. Not only is GE Aerospace, which manufactures aircraft engines and other industrial products, the most profitable part of General Electric, but it now has a renewed focus on rewarding stockholders, announcing recently that it is raising its quarterly dividend payment by an incredible 250%.
Beginning on April 15, GE Aerospace will pay a quarterly dividend of 28 cents per share, up from 8 cents previously. At an investor event in New York City in March, GE Aerospace said it plans to return 75% of free cash flow to shareholders in the form of dividends and stock repurchases moving forward. The company expects to generate more than $5 billion in 2024 free cash flow, which implies more than $3.7 billion in shareholder distributions.
General Electric completed its spinoff of GE Vernova (NYSE:GEV), the power-generation business, on April 2 of this year. GE HealthCare (NASDAQ:GEHC) was separated in early 2023. The stock of GE Aerospace is up 55% so far in 2024.
On the date of publication, Joel Baglole did not have (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.
