All weather stocks: Two more names to ride out this rough market
There are two more stocks to consider for riding out the stock market storm of 2025. One sits atop a mountain of trash and the other atop a pile of cash. These are part of our new stock lists at CNBC Pro, which we launched with the All Weather Stock List near the end of last month. As stated on Feb. 26, we started the All Weather list because of some troubling signs in the markets and economy, including the too-low Cboe Volatility Index level and Walmart’s poor forecast. This was cause enough for a look at stocks and funds that are durable and can provide income. We are creating the lists using stock analysis methods, screening techniques and Wall Street research used by the pros. (You can view updates on our stock lists here .) Update on All Weather list First, a quick update on how the first member of the All Weather list is doing: The VanEck Durable High Dividend ETF (DURA) . So far, the exchange-traded fund is living up to its name with a return of about 1% versus an S & P 500 decline of about 6% since we wrote about it in Feb. 26. DURA 1M mountain VanEck Durable High Dividend ETF, 1 month Its top holdings include defensive shares such as Johnson & Johnson and Altria , which are enjoying strong months as investors dump their “Magnificent 7” holdings for shares with steady cash flows. New addition: Waste Management Our next addition to the list is Waste Management (WM) , the trash and recycling giant that scored highly in our screen of low-beta and low-volatility stocks that are weathering the market so far this year. Waste Management has a beta of 0.5, meaning it is one of the steadier names in the S & P 500 as the benchmark fluctuates. The shares are basically flat for the last month during this market turmoil. It also sports a small dividend. WM YTD mountain Waste Management, YTD Trash, along with some other industries like funeral services and tobacco, have typically been looked at on Wall Street as recession havens because they are services that are always needed. That’s actually backed up by some strong results during the toughest economic periods. “The industry has defensive qualities with recurring and predictable revenue streams,” wrote Deutsche Bank in a favorable note on the waste industry last year. “Peak-to-trough MSW (Municipal Solid Waste) generation declined under 5% during the Great Recession,” stated the Deutsche Bank note, which pointed out the waste stocks outperformed the S & P 500 by a large margin from 2007 to 2009. We are likely not headed into another one of those kinds of dire periods, but there are signs that the consumer and companies are pulling back. Delta Air Lines’ lowered forecast this week was the latest signal . Next addition: Berkshire Hathaway Our next addition to the list is the iconic Berkshire Hathaway . Have you noticed which stock is flat this week while the market is reeling? It’s Warren Buffett’s conglomerate. I don’t think there’s ever been a U.S. company that’s more of a fortress than Berkshire is right now. It has a $334 billion cash pile that’s bigger than the market value of all, but about 23 companies in the S & P 500. Berkshire gets nearly a third of its revenue from the defensive insurance business, according to FactSet data. Buffett has trimmed down the stock portfolio for the last 9 quarters, making it no longer as beholden to the moves in, say, Apple shares. “We continue to believe BRK’s shares are an attractive stock in an uncertain macro environment, while insurance fundamentals remain strong and with good margin visibility,” said UBS after Berkshires’ earnings last month. UBS has a buy rating and $557 price target for the stock. BRK.B YTD mountain Berkshire Hathaway, B-shares I don’t believe Buffett has been selling stock and amassing cash steadily as some sort of expectation of an imminent stock market crash. I think it’s more about market valuation that’s been steadily creeping into the stratosphere over the last two years. I think when valuations get out of control, he starts to take a more defensive posture. And since Buffett apparently hasn’t been able to find anything at a reasonable price for years, a sizable cash mountain has resulted. Buffett sort of gave a nod to the lack of values out there in his annual letter last month: “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.” I think the 94-year-old legend is also building this fortress to give his successor, Greg Abel, the strongest footing when he eventually takes over. And that’s the reason to be optimistic about Berkshire beyond whatever economic or market setback may come. If a slowdown or recession hits and market valuations come down, Buffett and/or Abel will not hesitate to finally deploy that capital at bargain prices. And like during the Great Financial Crisis, Buffett will be among the few firms in a position to do so. Buffett in the annual letter reiterated his commitment to equities and I believe him. He’s just waiting for the right chance, which may come after this latest washout is over. The list So here’s where are All Weather Stock List stands now: This is not a portfolio, but a starting point for research by investors with a particular macro or industry view. We’ll be adding to this list and creating others as the year goes on.
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