Investors should focus on buying stable stocks at a lower valuation as uncertainty grows due to policies out of Washington, according to Goldman Sachs. The stock market has been under pressure recently, with the S & P 500 briefly dipping into correction territory last week. The broad market index struggled again on Tuesday, losing more than 1%. Traders have been fearful that President Donald Trump’s tariffs on imports from Mexico, China and Canada — along with a slew of cuts to government spending — could spark a sharp economic slowdown. Trump himself warned this month that the economy will likely undergo a transition , though Treasury Secretary Scott Bessent said this doesn’t mean a recession is likely to happen . “As policy uncertainty (particularly around tariffs) weighs on market sentiment and growth expectations, investors have been increasingly looking to play defense as evidenced by recent outperformance of lower volatility stocks,” Goldman Sachs’ Deep Mehta wrote in a Monday note. “To that end, we focus investors on identifying stocks that offer not only low market-relative stock price volatility but also fundamental stability, as measured by defensible revenue streams with low variability, solid forward growth and financial returns profiles alongside still attractive valuations vs. history,” Mehta added. Goldman screened for stocks that met the following criteria: Year-over-year sales growth volatility of 11% or less over the past 20 quarters Average sales growth of 5% or more over the past 20 quarters A ratio of the above metrics of 1 or less, which is indicative of “a more attractive combination of low sales volatility and positive sales growth.” Stocks trade 5% or more below their historical multiples Stocks on the list are rated buy Beverage company PepsiCo made the list. Shares have ticked down about 2% in 2025, outperforming the S & P 500’s decline of roughly 5%. Shares are currently trading at a roughly 17 times forward price-to-earnings ratio, compared to its five-year average of 24 times. Analyst Bonnie Herzog noted that Pepsi’s long-term growth catalysts remain key catalysts for the stock, which include efforts like automation in its business. PEP YTD mountain PepsiCo stock in 2025. “Look for the company’s impressive revenue growth management capabilities, its owned distribution network and superior supply chain to drive growth opportunities in beverages, particularly across developing and emerging markets,” the analyst said. Trash and recycling pickup company Waste Management also made the list. Shares are trading at 13 times forward earnings. That’s below its five-year average of 14 times. Analyst Jerry Revich said he sees “resilient high-single digit unit profitability” for Waste Management’s core solid waste segment, despite the loss of a tax credit for using alternative fuel. WM YTD mountain Waste Management stock in 2025. “Additionally, the company’s constructive landfill gas build-out update and solid waste M & A execution are expected to contribute to its growth,” Revich said. Other names on the list include Travelers and Microsoft .
