Southwest Gas Holdings (SWX)

The utility business isn’t a particularly exciting one. But for investors who want to earn steady returns through thick and thin, the sector should not be ignored.

No matter what the economy is doing, people still need to heat their homes in the winter. And that’s why Southwest Gas Holdings could be an opportunity.

The company’s subsidiary, Southwest Gas Corp, is a natural gas utility serving more than 2 million customers in Arizona, Nevada and parts of California. Meanwhile, its other segments provide natural gas storage, transportation and other energy infrastructure services.

While the S&P 500 is down about 5% in 2022, Southwest Gas Holdings shares are up 16% year to date.

The company also recently raised its quarterly dividend and offers a decent 3.1% annual yield.

Last week, BofA analyst Julien Dumoulin-Smith upgraded Southwest from neutral to buy, and raised the price target to $88. That implies potential upside of roughly 10% from current levels.

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Logitech International (LOGI)

Compared to the solid performance of many utility stocks in 2022, tech is a beaten-down sector at the moment. Year to date, the tech-centric Nasdaq has slipped 10%.

Logitech is one of the out-of-favor tech stocks. Shares of the computer peripherals manufacturer tumbled 16% in 2021 and is down 34% over the past 12 months.

But business isn’t exactly in the dumps. Earlier this month, management updated their outlook full-year outlook, projecting 2% to 5% sales growth in 2022, followed by mid-single-digit growth in 2023.

BofA sees a major rebound in the stock on the horizon. In late March, analyst Adam Angelov initiated coverage on Logitech with a buy rating, citing the company’s “strong track record of execution” and market share expansion.

His price target is set at $107 — about 50% above where the stock currently trades.

FedEx (FDX)

FedEx shares had a strong run in the first year of the pandemic. After all, delivery service is an essential part of e-commerce — an industry that flourished in the stay-at-home environment.

But more recently, sentiment has changed towards the delivery giant. FedEx shares have slipped more than 20% over the past year.

The company delivered a solid earnings report last month. During the quarter, revenue rose 9.8% year over year to $23.6 billion. Adjusted earnings jumped 32% to $4.59 per share.

BofA analyst Ken Hoexter reiterated a buy rating on FedEx shares last month noting the company’s “historically low valuation.”

Right now, FedEx stock has a price-to-earnings ratio of 12, substantially below its five-year average P/E of 48.

While Hoexter also lowered his price target on FedEx from $297 to $280, the new target is still roughly 25% above where the stock sits today.

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Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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