2 Sectors and 2 Stocks to Buy Now

Right now, amid the worst start to the year for the stock market ever, two sectors seem to be holding up nicely.
These sectors are utilities and consumer goods. This makes sense; regardless of what the broader economy or stock market is doing, people will pay for electricity and buy  necessities. But when utilities and consumer goods are the outperformers so far, that’s not a bullish sign for the border economy.
Basic materials and financial are the worst-performing sectors of the year so far, down over 12% each. Utilities is the best performing, but still down 2.3%. Then there are consumer goods, which is the second best sector and down 7.4% year-to-date. Longer term, over the last year, consumer goods has been the second-best-performing sector (down 5.6%), behind only the tech sector (down 2.9%).
It really is a mixed bag of feelings out there right now. JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon says he isn’t forecasting a recession and that the economy looks pretty good. CSX Corp. (NYSE: CSX) CEO Mike Ward has called what we’re seeing – with dollar strength, low gas prices and low commodity prices – a straight recession.
Then we have the famed bond investor, Jeffrey Gundlach of DoubleLine, who says there’s a 30% chance the U.S. economy heads into recession this year.
With all that, it doesn’t hurt to play it safe. Here are two stocks to buy now in the two sectors that are currently holding their own:

Top Pick in Utilities: CenterPoint Energy (NYSE: CNP)

This Houston-based energy company has one the largest setups in the business when it comes to electric generation and natural gas delivery. That is not to mention that it jointly controls an oil and gas MLP. The 50% ownership it has in the oil and gas MLP, Enable, has also been an overhang, though. But still helps create a diversified utility business. 
CenterPoint is located in one of the more vibrant metro areas of the US, with Houston showing strong population growth – which is great for energy growth usage. Granted, the stock is off 20% over the last year given lower natural gas demand, the regulated utilities business is still going strong.
It has a strong infrastructure improvement program in place to support the growth in the Houston market. You couple the solid regulated utility assets with the efficiently ran non-regulated gas pipeline and you have a unique utility play and one of the stock to buy.
Don’t forget that CenterPoint also offers a juicy 5.7% dividend yield.  

Top Pick in Consumer Goods: Archer Daniels Midland (NYSE: ADM)

This company is one of the world’s largest agriculture players and bit of a derivative play on the consumer goods and staples market. Archer Daniels runs a network of agriculture processing, storing and transporting assets. Basically, it’s a middle man that buys crops from farmers, processes them, then sells them to feed and energy companies.
Archer Daniels’ scale is unrivaled. And as an agriculture company, it’s a play on the fact that everyone has to eat. That means it should do well on the rise of soybean usage and meat consumption in emerging markets.
Another factor: its ethanol business gets support from government requirements for  ethanol usage in fuel. Archer Daniels is also looking to expand its business, both overseas and horizontally, with the purchase of Wild Flavors – the natural flavor for food and beverage company.
Offering a 3.5% dividend yield and trading at just 11 times earnings, it looks to be a solid pick for one of our stocks to buy now.
In the end, predicting where the market is headed in the short-term is a fool’s game. However, you can look to certain sectors to help take out some of the volatility. The two stocks to buy above are in the two sectors that look to be best positioned for 2016.

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