2 Undervalued Low Beta Stocks to Buy and 1 to Avoid

One way to analyze the performance of a stock is to know what kind of price movement is considered normal. And one way to measure that is by looking at the stock's beta value.  

Beta describes the correlation between a stock's price movement and its benchmark index, usually the S&P 500. Low beta stocks aren't significantly correlated with the market. For investors, that means its price movement tends to be less volatile than the movement in the broader market.  

Investors with a lower risk tolerance may gravitate towards low beta stocks. However, at the right time, these stocks can appeal to growth investors, specifically when other fundamental metrics show that these stocks are undervalued.  

That's the case with several low-beta stocks as summer winds down. This article analyzes two low-beta stocks that are set up as good buys. We'll also cover one low-beta stock with an attractive long-term outlook but not one to buy right now.  

This Consumer Staples Giant is an Attractive Buy 

On August 17, the index of leading economic indicators declined for the 17th consecutive month. Sticky inflation and higher interest rates continue to fuel expectations for a recession either later this year or in early 2024.  

Despite those concerns, consumer staples stocks have held up well even as the economy continues to weaken. But you'll forgive investors in General Mills, Inc. (NYSE: GIS ) stock for feeling left out. GIS stock is down 15% in 2023 and 21% in the three months ending on August 16.  

Investors may be reacting to the company's mixed earnings report in the last quarter. The company posted revenue of $5.03 billion, lower than the $5.18 billion analysts expected. But that number was still 2% higher year-over-year (YoY). And the company expects fiscal year 2024 revenue to increase between 3% and 4%.  

Plus, General Mills offers a compelling dividend that currently has a 3.34% yield. If analysts are correct in giving the GIS stock price a 15% upside, now is a time to buy this undervalued low-beta stock.  

A Great Stock to Own While the Housing Market Settles 

Global Self Storage (NASDAQ: SELF) is a specialty real estate investment trust (REIT) that owns and operates 13 self-storage units in eight states. This is a good time to invest in self-storage stocks because demand is high. People continue to move out of major cities. But as they wait for their new home to be built or settle for a smaller property, their stuff needs to go somewhere. 

Global Self Storage's revenue reflects this demand. From 2019 through 2022, operating income has nearly tripled from $1.4 million to $3.6 million. And one reason for this increase is margin expansion.  

Analysts forecast a 37% increase in SELF stock that will take shares to $7. Plus, as a REIT, investors can count on a predictable dividend that currently has a 5.71% yield.  

Patience May be Rewarded  

BioNTech SE (NASDAQ: BNTX) is a biotechnology company that was one of the sector winners in 2020. The company co-developed the Comirnaty vaccine. This was the first vaccine for the SARS-CoV-2 virus to be granted emergency use authorization (EUA) by the U.S. Food & Drug Administration (FDA).  

But as the saying goes, that was then; this is now. BNTX stock is down 72% from its high of $89. And it's easy to see why. BioNTech posted $167 million in revenue in the last quarter, which was down sharply on a YoY basis.  

BioNTech has a compelling pipeline that includes 38 drugs in clinical trials. Several of these drugs are targeted for the treatment of specific cancers. This may make BNTX stock a solid long-term investment for patient investors. But if you're looking for gains in the next year, there may be better options.

The article "2 Undervalued Low Beta Stocks to Buy and 1 to Avoid" first appeared on MarketBeat.