Ticker Reports for February 27th
Volatility Is Back: 3 Stocks To Cushion the S&P 500's Swings
Regimes are changing in the market, and this could mean a few things, but today, it means that volatility is back. Whenever these shifts come, specifically to the S&P 500 index, investors tend to decrease their exposure to riskier stocks to look for more defensive names in the market to cushion some of the risks that come with these volatility spikes.
This is where names in the consumer staples sector usually come into play. These stable and predictable business models and product lines usually carry low betas, compressing the volatility that comes with them even with a broader market selloff like the one experienced in recent weeks. Therefore, they are more attractive buy targets for investors to consider, which is why today’s list is important as well.
By keeping an eye on names like Realty Income Co. (NYSE: O) to represent a portfolio of stable and predictable holdings in the real estate sector or other product offerings like tobacco and convenience names through Altria Group Inc. (NYSE: MO) and even a staples beverage brand of soda like PepsiCo Inc. (NASDAQ: PEP) all align to offer investors some of this perceived safety that will be chased as volatility shows it’s here to stay for a little while longer.
Realty Income Offers Investors a Compounding Chance
Investors can see the benefits of holding Realty Income stock, not only through its low volatility profile but also because of its income potential. As a real estate investment trust (REIT), Realty Income offers shareholders a payout of up to $3.21 per share today.
This not only represents a dividend yield of as much as 5.7%, but investors also benefit from this payout being issued monthly rather than the typical quarterly payouts that other companies choose to use instead. Even with these attractive features, the stock trades cheaply enough at 86% of its 52-week high to offer a double-digit upside.
such as the one being called for by analysts from Stifel Nicolaus, who decided to not only reiterate their buy rating on Realty Income stock as of January 2025 but also place a valuation of up to $66 per share on it. Now, this price target would represent a new 52-week high on the stock and also a net upside of as much as 18% from where it trades today.
Institutional Capital Chose Altria Group Stock
As of February 2025, reports show that allocators from the Royal Bank of Canada decided to boost their holdings in Altria Group stock by as much as 17.4%, bringing their net position to a high of $466.8 million today. This is a bullish sign of confidence that investors should consider in this new flight to safer names amid volatility.
However bullish this may seem, it’s not the best feature that Altria stock brings to the table today. Like Realty Income, this company’s stability and predictability also enable its management to offer its shareholders a dividend payout of as much as $4.08 per share today.
Considering today’s prices, which are a bullish 95% of their 52-week highs, Altria Group stock’s dividend would translate into an annualized yield of up to 7.44% to beat inflation and make up for any further volatility that the S&P 500 index may bring to portfolios in the coming months.
Pepsi Stock’s Discount Won’t Last Forever
Even though Pepsi stock now trades at 83% of its 52-week high, which may not seem that bearish at all, other valuation metrics show that the company offers a value entry like no other in the past seven years. When considered from a forward price-to-earnings (P/E) basis, today’s 18.3x multiple falls into the bottom range of regular valuations.
A multiple closer to 23.0x on a forward P/E basis would be normal for Pepsi stock, showing investors how this household name with a low beta can be a perfect addition to this volatility compression portfolio strategy today. Then, there was the recent collapse of the company's bearish sentiment.
Investors can note that up to 22.9% of Pepsi’s short interest collapsed over the past month alone, a clear sign of bearish capitulation in the face of a bullish skew in the stock's risk-to-reward ratio. This could be especially the case as analysts from Citigroup reiterate their buy rating on Pepsi stock, this time also keeping a valuation of up to $170 per share on the name.
Calling for the stock to flirt with its 52-week high of $183.4 per share, these analysts imply that Pepsi can deliver up to 12.2% from where it trades today, bringing an unusual double-digit upside potential in a defensive name.
Long-Forgotten Trump Prophecy Finally Coming True?
This shouldn't surprise anyone who's been paying attention, but...
Pres. Trump may be about to unleash the biggest "dollar reset" since 1971.
These Consumer Staples Shine Amid Market Turmoil
The stock market has hit a rough patch lately, with the benchmark S&P 500 ETF (NYSE: SPY) sliding nearly 3% in a single week. Most sectors have followed the downward trend, rattled by rising economic uncertainty and fear. Yet one corner of the market is defying gravity: the consumer staples sector. Represented by the popular Consumer Staples Select Sector SPDR Fund (NYSE: XLP), this group of steady performers has not only outperformed the broader market but also broken through previous resistance levels.
Its defensive nature is proving its worth right now, and from a technical perspective, the sector looks poised for more gains. So, what’s driving this resilience, and how can investors tap into it? Let’s dive in.
Why Consumer Staples Thrive in Shaky Times
When economic storm clouds gather and markets sell off, consumer staples often emerge as a beacon of stability. This sector includes companies that produce life’s essentials, like food, beverages, household goods, and personal care products. People buy these items no matter how tight money gets, ensuring demand stays steady even in tough times. Unlike discretionary purchases like luxury cars or vacations, staples are non-negotiable, giving companies in this space consistent revenue and earnings.
This reliability makes consumer staples a classic “defensive” investment. When growth stocks stumble, and investors prioritize capital preservation over chasing significant gains, these stocks become a safe haven. Many also offer dependable dividends, sweetening the deal when volatility spikes.
History bears this out: during the 2008 financial crisis, consumer staples weathered the storm far better than flashier sectors like technology or financials. It’s not about blockbuster growth; it’s about holding steady when everything else wobbles.
How to Gain Exposure to the Sector
There are plenty of options for investors looking to ride this wave of stability. Below, we’ll look at a top ETF for broad exposure and two standout individual stocks that have led the pack in performance over the past year.
1. Consumer Staples ETF
The XLP ETF is a go-to choice for those seeking diversified exposure without breaking the bank. With a razor-thin expense ratio of 0.09% and a dividend yield of 2.2%, it’s both cost-effective and income-friendly. Tracking the Consumer Staples Select Sector Index, XLP holds over 40 of the biggest names in the business, including heavyweights like Costco, Walmart, Coca-Cola, and Procter & Gamble. Its broad reach and passive management make it a solid pick for long-term investors aiming to dial down risk while staying in the game.
2. Costco Wholesale
Costco (NASDAQ: COST) has been a standout performer as XLP’s largest holding at 10.7% weighting. Over the past year, its stock has soared more than 43%, and year-to-date, it’s up 15.2% through as of Tuesday’s close. The wholesale giant’s following earnings report, due March 6 after markets close, could fuel further momentum. Analysts expect earnings per share (EPS) of $4.09, a 10.2% jump from last year, with revenue projected at $63.2 billion, up 8.15% from the prior quarter.
Costco’s knack for delivering value to budget-conscious shoppers keeps it thriving, even as economic fears mount.
3. Philip Morris International
Philip Morris International (NYSE: PM) has been a defensive dynamo, ranked as XLP’s eighth-largest holding with a 5.6% weighting. Its stock has surged 72% over the past year and is up nearly 31% year-to-date, making it one of the S&P 500’s top performers. Beyond its robust 3.43% dividend yield, the company’s recent earnings have lit a fire under its share price.
On February 6, 2025, Philip Morris reported Q4 2024 EPS of $1.55, beating estimates of $1.49, with revenue of $9.7 billion topping the $9.4 billion expected. But the real spark came from its 2025 guidance: earnings of $7.26 to $7.39 per share, well above the $6.99 analysts had penciled in. While cigarette volumes dipped 2% in the Americas, a 33.4% surge in oral product shipments, led by Zyn nicotine pouches in the U.S., stole the show.
The Bottom Line
The consumer staples sector’s resilience amid market chaos underscores its timeless appeal. Whether through the diversified lens of XLP or standout stocks like Costco and Philip Morris, investors have compelling ways to anchor their portfolios. As uncertainty lingers, this sector’s blend of stability, dividends, and upside potential could be just what the market doctor ordered.
A market crash is coming—here's when
The stock market cycle I've used to identify the most likely day of the next market crash is the exact same indicator that helped me call the bear market of 2018... the bull market in 2020... the bear market in 2022... the roaring bull markets in 2023 and 2024... and more. I'm convinced it has helped me identify the next big crash too. We are at an important juncture in the markets. Knowing what to do in the months to come is critical.
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3 Stocks Powering the Future of Autonomous Driving
The age of autonomous or self-driving vehicles is nearly upon us. Robotaxis are becoming more commonplace as Alphabet Inc. (NASDAQ: GOOGL) owned Waymo’s robotaxis, which has already delivered 5 million rides, surpassing over 25 million miles of driving. Waymo has plans to expand to Austin, Texas, Miami, Florida and Atlanta, Georgia in 2025. The new Trump administration is seeking to ease regulations on autonomous driving with the influence of Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk. Here are three stocks instrumental in making autonomous driving a reality sooner rather than later. The 250% surge in WeRide Inc. (NASDAQ: WRD), a China-based autonomous driving platform with NVIDIA Co. (NASDAQ: NVDA) investment, ushered in more attention on robotaxis.
Mobileye: Supervision Is No Longer Just for Superheroes
A key player for autonomous driving will be Mobileye Global Inc. (NASDAQ: MBLY), a developer and supplier of advanced driver assistance systems (ADAS) autonomous driving technology solutions. The company’s Mobileye Drive platform is a turn-key system-on-a-chip (SoC) system that utilizes camera-heavy, AI-driven, and light detection and ranging (LiDAR)-boosted solutions.
The computer and technology sector company’s SuperVision system uses 11 cameras for a full 360-degree perception processing at 1,200 tera operations per sector (TOPS). The camera system is cheaper and more scalable than LiDAR-only systems.
Lyft to Launch Mobileye Robotaxis in Dallas, Texas in 2026
Mobileye made headlines on Feb 10, 2025, when TechCrunch reported that rideshare operator Lyft Inc. (NASDAQ: LYFT) has plans to bring robotaxis powered by Mobileye systems to its app in 2026. Lyft plans to launch them in Dallas, Texas and then scale across multiple cities in thousands of vehicles. Marubeni is rumored to own and finance the actual Robotaxi vehicles. Marubeni is expected to use Lyft’s Flexdrive to manage the fleet and keep utilization rates high.
When asked about the robotaxi opportunities with robotaxis during their Q4 2024 earnings call, CCO Dan Galves commented, “So, I do see kind of a revival of the robotaxi opportunity, mostly due to the success of Waymo. And we see indications from the market in terms of partners, whether it's operators, big platform builders who would like to play a more meaningful -- to be a more meaningful actor in this emerging market.”
Luminar Technologies: Leading the LiDAR Standard
Autonomous vehicles need to be able to sense their surroundings in order to navigate safely. There is much debate about whether a camera-based system like Mobileye's or Tesla’s is a better system versus LiDAR, which uses pulsed laser lights to create 3D models of the surroundings.
LiDAR’s vulnerability lies in the potential interference from external light sources in weather conditions like fog, rain and snow. Luminar is under the gun as it burned through $1.3 billion in cash in 2025 and implemented 20% layoffs to curb cash burn. It also faces competition from Mobileye’s imaging radar, which is more effective than LiDAR in most weather conditions, with the exception of heavy snow.
Luminar Technologies Inc. (NASDAQ: LAZR) insists that LiDAR is the way to go. Its Iris sensor blasts 1.5 million points per second in a 250-meter range, which is way past Mobileye's camera range. This, combined with its Sentinel software stack, which integrates LiDAR with HD maps and perception software, provides a full vision stack. It is a key component for robotaxis looking for needle precision.
Luminar's argument is convincing as the company has over 50 partners and 12 of the top 15 automakers on board with its LiDAR standard. The Volvo EX90 is the first and only LiDAR technology included as standard equipment on a global production vehicle, which started shipping in September of 2024.
Aptiv: Motional Level 4 Robotaxis Underway
Aptiv PLC (NYSE: APTV) is an automotive components manufacturer providing electrical, electronic and safety technology solutions to OEMs. Aptiv partnered with Hyundai in a joint venture called Motional, an autonomous vehicle technology company.
They’ve already been using Motional’s technology to test level 4 autonomous driving using the Hyundai IONIQ 5 robotaxis that utilizes machine learning. Aptiv supplies the electrical architecture, connectivity and ADAS software to OEMs.
Motional has already logged 1.5 million autonomous miles in 2024. Waymo announced a new partnership using Hyundai IONIQ 5 EVs for their fleet of robotaxis. Hyundai has stated the Waymo deal doesn’t influence Motional.
Aptiv closed 2024 with $31 billion in new business bookings and $7 billion in new China business. Operating cash flow hit a record $1.1 billion in the quarter.
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