This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Small, Defensive Stocks for a Volatile Market

Editor's note: As part of our partnership with PBS's Nightly Business Report, TheStreet's Bryan Ashenberg joined NBR on Tuesday (watch video and read transcript here) to highlight small- and mid-cap stock picks for a volatile market.

NEW YORK ( TheStreet) -- With market volatility on the rise and the health of the global macroeconomic outlook in question, many investors are looking for a safe haven. Small- and mid-caps are typically among the more speculative types of equities, but even within this universe of stocks, we can find names whose qualities provide some defensive characteristics. Here are three companies worth checking out.

First up is Healthcare Services Group (HCSG - Get Report). The company is a leading provider of housekeeping, laundry, linen and food services to the long-term care industry and is a high-quality growth play with impressive defensive characteristics.
Word on the Street

The company boasts 90%-plus customer renewal rates, a robust balance sheet and a healthy 4.3% dividend. In fact, Healthcare Services Group has raised its dividend for an impressive 32 consecutive quarters.

The company's new foray into food services is providing an extra boost to revenue growth and offers opportunities for continued operating margin expansion. We are bullish on the company because its mix of intriguing growth drivers and defensive industry and stock components make it an attractive and stable investment.

Second, SBA Communications (SBAC - Get Report) owns and operates wireless communications towers in the U.S., Canada, Puerto Rico and the U.S. Virgin Islands. SBA generates the bulk of its revenue from leasing antenna space on its towers to wireless-service providers and the remainder from providing site-consulting and end-to-end construction services for its wireless-carrier customers.

The basic investment thesis is that the tremendous growth in the demand for mobile broadband is driving the need for greater tower usage. SBA has excellent visibility into its revenue stream, as most leases are executed on a multi-year basis. The wireless tower companies have 3% to 4% annual rent escalators built into most contracts.

>> Discover More Breakout Stocks to Boost Your Portfolio

The company's business model has considerable leverage, stemming from the fact that new antenna leases on an existing tower require very little in the way of incremental expenses. Tower companies have high barriers to entry as local zoning laws and land availability help reduce competition. We believe that the company's steady cash flow, U.S.-focused revenue generation and fixed-rent increases continue to offer investors a safe haven in this volatile market.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
ALLT $5.45 2.30%
HCSG $34.56 -0.32%
SBAC $117.12 0.93%
AAPL $123.38 0.50%
FB $96.35 2.30%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs