Hedge Stock

In stock market investment, risk is inevitable. Whether it is market fluctuations, political events, economic crises, or changes in the performance of individual companies, they may have an impact on stock prices. Therefore, investors need to have certain risk management capabilities to reduce losses and protect principal.

Hedge stocks are a risk management tool. Safe-haven stocks refer to stocks that can maintain stable performance or rebound when the market is declining or uncertain. Safe-haven stocks typically have the following characteristics:

Low volatility: The price movements of safe-haven stocks are relatively small and they are not easily affected by market sentiment.

High Dividends: Safe-haven stocks often provide stable and generous cash flows, which can generate returns for investors even during market downturns.

Strong industries: Safe-haven stocks usually belong to industries with competitive advantages, stable demand, and good growth, such as consumer goods, health care, utilities, etc.

High-quality companies: Safe-haven stocks usually come from companies with good financial status, management level, market position, brand awareness, and the ability to maintain performance in various environments.

So, how to choose safe haven stocks? Here are some commonly used indicators and methods:

Beta: Beta is a measure of a stock's correlation with the market. The lower the beta, the more immune the stock is to market fluctuations. Generally speaking, stocks with a beta below 1 can be considered safe havens.

PE value: PE value is a measure of stock value. The lower the PE value, the cheaper the stock. Generally speaking, stocks with a PE value lower than the industry average can be regarded as safe haven stocks.

PEG value: PEG value is an indicator of the growth and value of a stock. The lower the PEG value, the more growth and value the stock has. Generally speaking, stocks with a PEG value below 1 can be considered safe havens.

ROE value: ROE value is a measure of a company's return on capital. The higher the ROE value, the more effectively the company can use capital to create profits. Generally speaking, companies with an ROE value higher than the industry average can be considered high-quality companies.

Dividend distribution ratio: The dividend distribution ratio is an indicator of the company's dividend level. The higher the dividend payout ratio, the better the company can return profits to shareholders. Generally speaking, companies with a payout ratio higher than the industry average can be considered high-dividend companies.

In addition to the above indicators, investors can also choose safe-haven stocks that suit them based on their risk preferences, investment goals, investment period and other factors. The following are recommendations for some safe-haven stocks for reference only:

TSMC: TSMC is the world's largest semiconductor foundry, with the advantages of leading technology, diverse customers, and stable profits. TSMC's Beta value is 0.85, PE value is 25.6, PEG value is 1.1, ROE value is 31.2%, and dividend payout ratio is 2.3%.

Uni-President: Uni-President is Taiwan's largest food manufacturer, covering beverages, ready-to-eat, frozen, catering and other fields. Uni-President has the characteristics of brand awareness, product innovation and channel advantages. The unified Beta value is 0.63, the PE value is 24.8, the PEG value is 1.4, the ROE value is 14.7%, and the dividend payout ratio is 3.8%.

Taiwan University: Taiwan University is the largest medical service provider in Taiwan, with multiple hospitals and clinics. Taiwan has the advantages of medical expertise, service quality, and stable demand. Taiwan's Beta value is 0.54, PE value is 18.9, PEG value is 0.9, ROE value is 12.9%, and dividend payout ratio is 4.2%.

Chunghwa Power: Chunghwa Power is Taiwan's largest telecommunications service provider, providing fixed line, mobile, broadband and other services. Chunghwa Power has the advantages of market position, cash flow and policy support. Chunghwa Power's Beta value is 0.49, PE value is 15.5, PEG value is 0.7, ROE value is 11.6%, and dividend payout ratio is 6.4%.