As I write, the market is rising on early signs of hope that the coronavirus pandemic may have peaked. Of course, it’s too soon to be certain. And even if the outbreak has peaked, we don’t yet know how severe or long-lasting the damage will be to the global economy.
Against such an uncertain backdrop, I think it makes sense to focus on survivability when picking stocks. By this I mean stable revenue, strong balance sheets and decent cash generation.
In this vein, I’ve already added British American Tobacco to the portfolio. This stock isn’t universally popular, as the comments on my recent piece highlighted. But I’m pretty sure it will survive COVID-19 relatively unscathed. Brokers also appear confident:
This week, the SIF stock screen has highlighted another stock which I think should score highly as a survivor. FTSE 100 defence giant BAE Systems (LON: BA) will raise ethical flags for some investors. But it’s beaten the market comfortably so far this year, falling by just 12% versus a 25%+ drop for the FTSE 100.
I rate BAE as a reliable long-term performer and I’m attracted to the diversity of…
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