The Motley Fool

Beat A Volatile FTSE 100 With Diageo plc, BT Group plc And BAE Systems plc

Diageo

With a beta of just 0.8, shares in Diageo (LSE: DGE) (NYSE: DEO.US) should offer a less volatile experience than the wider index. In fact, for every 1% move in the FTSE 100, they should (in theory) move by just 0.8%. This means that, with the FTSE 100’s outlook still being relatively uncertain, they could prove to be a sound defensive play.

In addition, Diageo also has growth potential. Certainly, the last year has been a disappointing one, with the company’s bottom line being flat, but next year it is forecast to deliver earnings growth of 8%, which is slightly ahead of the wider market’s growth rate. And, with China apparently readying a stimulus package to boost its economy, emerging markets could deliver improved growth moving forward, which would aid Diageo’s top and bottom lines as a result of its considerable exposure to the developing world.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

BT

Although it may seem as though BT (LSE: BT-A) (NYSE: BT.US) is becoming an increasingly growth-oriented company, with its move into pay-tv and the possible acquisition of mobile network, EE, highlighting its bright prospects, it remains a great defensive play.

For example, over the last five years BT has increased its bottom line in each year, with it averaging 12% growth per annum. That’s a superb rate of growth and shows that, even when the wider economic picture is uncertain, BT can still deliver strong returns to its investors – as further evidenced by a share price that is up 200% in the last five years, versus a gain of 28% for the FTSE 100.

In addition, BT also has a beta of just 0.8, which should mean that it delivers a less volatile share price experience than the FTSE 100 moving forward.

BAE Systems

Although BAE’s (LSE: BA) industry is subject to wild swings in demand, in the long run defence budgets across the globe are unlikely to fall significantly. That’s because, while the developed world is undergoing a period of austerity, the developing world is likely to increase overall spending on defence as it becomes even wealthier. As such, BAE’s long term future appears to be relatively bright.

Furthermore, BAE has a beta of just 0.9, which means that its share price should be less volatile than that of the wider index and, with a yield of 4%, it could prove to be an excellent defensive play over the medium to long term.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Peter Stephens owns shares of BAE Systems. The Motley Fool UK has recommended Diageo (ADR). We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.