Analysts and economists entered 2019 fearing that a slowdown in the US economy had the potential to exacerbate a shaky stock market.
Blue-chip stocks have soared to start 2019, and recent data suggests that the U.S. economy is still robust. The U.S. economy posted 3.2% annualized growth in the first quarter of 2019, and the economy added 263,000 jobs in April. These marks blew past expectations.
Does this mean investors should ignore the “sell in May and go away” adage? Not necessarily. Valuations are sky-high right now. Those waiting for a pull back may want to consider exposure to consumer defensives.
Lowe’s (NYSE:LOW) is a top option. Shares of the home improvement retailer giant have climbed 21.6% in 2019 as of close on May 3. The stock is up 33.4% from the prior year. Lowe’s talked up U.S. consumer confidence in its Q4 and full-year 2018 earnings report.
In 2019, Lowe’s expects this positive environment will lead to a 2% revenue increase. It forecasts earnings per share between $6 and $6.10 in 2019.
Lowe’s has achieved over 50 consecutive years of dividend growth. It has declared a cash dividend every quarter since its public listing in 1961. More recently, it paid out a quarterly cash dividend of $0.48 per share. This represents a modest 1.7% yield.
The stock is a fantastic option for investors looking to adopt a more conservative approach as we near the midpoint of 2019.
