The stock market has been very volatile of late and that can be unnerving for investors who don’t want to obsess over their investments and check on them all the time. One metric those investors should get familiar with is beta as that which measures how closely a stock follows the overall market.
A beta value of 1.0 suggests a stock has typically swung in the same direction as the market. If the beta is higher than that, it’s even more volatile than the stock market, whereas the opposite suggests low volatility.
A good stock that can give you some peace of mind and trades at a low beta is Thomson Reuters (TSX:TRI)(NYSE:TRI). The company is known for delivering quality information to its users and has a fairly stable business. In each of the past four quarters, its revenue has remained within a range of $1.4 billion U.S. and $1.6 billion U.S. And during that time, its operating margin has been at least 14% or better.
In addition, it pays a dividend that today yields 1.9%. That, combined with the stock’s 81% increase in value over the past five years has allowed long-term investors to earn some great returns without taking on much risk.
With a beta value of around 0.3, this isn’t a stock you’ll have to worry about jumping up and down all the time. And with shorted shares making up just 0.3% of its total shares outstanding, there aren’t many people out there betting that it will fail, either.
Whether you’re a long-term investor looking for some stability or just a decent dividend, Thomson Reuters can be a great stock to add to your portfolio.