3 Low-Risk Stocks Set to Outperform the S&P 500

Stocks to buy

In the turbulent stock market, dangers and uncertainties are high. Investors always look for that hard-to-find mix of growth and stability. These businesses are changing the perception of low-risk investments. They work in various industries, including travel technology, consumer staples, and human resources.

The first is a giant of the travel technology industry, especially in the rich markets of Mexico and Brazil. The second one is well known for its expertise in consumer staples. And the third one manages to skillfully navigate the complex world of employment services and human resources.

In short, these three low-risk equities stand out as unsung heroes amid the S&P 500‘s turmoil and uncertainty. They are providing investors with a haven of calm amid the storm.

Despegar (DESP)

a map of an ocean surrounded by beach leisure items to represent travel stocks

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Despegar (NYSE:DESP) is a leader in the travel technology sector thanks to steady booking growth.

Brazil and Mexico, the company’s two main regions, have seen robust demand and notable increases in gross bookings. Brazil saw a 56% year over year (YOY) growth to $670 million in Q4 of 2023. Meanwhile, Mexico saw a 28% YOY increase to $253 million. These striking numbers highlight its capacity for successful market share acquisition. 

For the remainder of Latin America, the corporation recorded a 40% YOY rise in gross bookings in Q4 of 2023, equal to 133% in constant currency. This demonstrates Despegar’s rising clientele and market reach. Despegar’s business-to-consumer (B2C) division saw robust growth, with gross bookings rising by an industry-best 41% YOY in Q4 to reach $1.3 billion.

Lastly, this expansion results from the company’s successful business strategy. It indicates its capacity to increase market share across a range of platforms and sales channels. In Q4, the white-label and B2B divisions saw notable growth, with gross bookings rising 69% and 63% YOY, respectively. Hence, these categories accounted for 14% of all gross bookings, indicating that revenue sources have been expanded and diversified. 

Conagra (CAG)

Conagra logo on a sign outside of a corporate campus

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During the quarter, Conagra’s (NYSE:CAG) International sector saw remarkable organic net sales growth of 5.6%. Specifically, Canada and Mexico saw organic net sales growth rates above 9%. This demonstrates the company’s robust worldwide market presence and skillful execution. Steady expansion shows that CAG can diversify its income sources outside the U.S. and take advantage of possibilities in other markets.

The food service segment’s organic net sales growth throughout the quarter was 4.3%, thanks to improved pricing mix and increased distribution of its frozen product line. This expansion demonstrates Conagra’s ability to meet the changing demands of consumers in the out-of-home eating market and support the food service industry. The segment’s performance demonstrates the firm’ can’s ability to adjust to shifting consumer habits. Thus, it uses its range of products to seize chances in the food service industry.

Lastly, food service and international categories saw increased adjusted operating margins, a sign of successful cost control and operational effectiveness. The sector specializing in food service had a noteworthy 1.93% gain in adjusted operating margin, while the international segment saw a 0.3% improvement. 

Heidrick & Struggles (HSII)

Group of colleagues discuss something in an office conference room. commercial real estate

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Heidrick & Struggles (NASDAQ:HSII) has improved its bottom line and solid financial performance. The company had solid financial results in Q4 2023, with $253 million in net sales. Despite adversities in its executive search sector, this is a 7% YOY boost. 

In addition, the company’s adjusted EBITDA for Q4 was $35.8 million, a noteworthy 38% increase YOY. The rise in adjusted EBITDA indicates an improved operational edge and cost control measures that Heidrick & Struggles has implemented.

HSII has attained profitability and margin enhancement in its diverse solutions area, supporting its potential for rapid expansion. Moreover, the company has effectively increased profitability in On-Demand Talent and Heidrick Consulting. It has achieved this despite difficulties experienced by its Executive Search division. 

Finally, a significant milestone for the on-demand talent segment was reached in Q4. As a result, the company recorded its first-ever full year of positive adjusted EBITDA. In detail, On-Demand Talent saw adjusted EBITDA of $0.8 million from the firm, up from a $1.4 million loss during Q4 2022. Overall, this indicates that the profitability trajectory of the segment is improving.

As of this writing, Yiannis Zourmpanos held long positions in CAG and HSII. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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