Why Now Is A Great Time For YOU To Buy WM. Morrison Supermarkets Plc

With the Dow Jones having endured a difficult week, many investment commentators seem to be getting rather worried.

Indeed, whenever I tune into financial news or read financial websites, they all seem to be talking about whether there will be a sell-off in September. Of course, various bits of ‘evidence’ are wheeled out to prove their point, but they key factor seems to be comments from the US Federal Reserve (the Fed).

Furthermore, the market seems to be of the view that the Fed will look to increase interest rates in the medium term and so begin the unwinding of a loose monetary policy that began during the credit crunch.

Interestingly, it seems rather perverse that the better the economic data coming out of the US, the more likely the reversal and the bigger the drop in the Dow Jones and S&P 500. Surely good data is good for companies and share prices should react positively?

Anyway, the positive data that seems to have caused something of a recent sell-off is a strengthening labour market. First-time claims for jobless benefits dropped the week before last to 320,000 — their lowest level since September 2007. The fall was considerably more than economists had forecast, highlighting the fact that the US jobs market continues to improve.

In addition, consumer prices (excluding energy and food costs that are deemed to be too volatile) increased by 0.2% in July and are up 1.7% over the last year. This means that consumer inflation is close to the Fed’s 2% target, which increases the likelihood that quantitative easing will taper-off.

Clearly, things are uncertain and it looks set to be a volatile month or two for stock markets on both sides of the Atlantic.

So, at times like these I like to look for a steady stock: something that is solid, pays a decent dividend and is good value for money.

Morrisons (LSE: MRW) (NASDAQOTH: MRWSY.US) ticks all of these boxes. It currently offers a yield of 4.2% and has the potential to expand online and into the lucrative convenience store segment.

Furthermore, it currently trades on a price-to-earnings (P/E) ratio of just 10.5, which compares favourably to both its sector and the FTSE 100. They trade on P/E’s of 10.9 and 15 respectively.

Morrisons may just prove that slow and steady wins the race; keeping its cool while all others around it lose theirs.

Of course, you may be looking outside of the supermarket sector for an addition to your portfolio. If you are, The Motley Fool has come up with a shortlist of its best ideas called 5 Shares You Can Retire On.

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> Peter owns shares in Morrisons. The Motley Fool has recommended shares in Morrisons.