Every stock carries some amount of risk. Some companies, while seemingly successful today, may not even exist 10 years from now, destroyed by excessive risk-taking. Dramatic meltdowns happen, and investors left holding the bag can suffer greatly. Companies that are unlikely to suffer this kind of collapse in the long run are often the least risky, as long as valuations are reasonable. These companies generally enjoy durable competitive advantages that insulate them, at least partly, from competitive pressures.
A few of our Foolish contributors have come up with three low-risk stock ideas that fit the bill: Pipeline stocks have turned out to be riskier than investors initially thought. There are still some great investments in the sector, including Enterprise Products Partners (NYSE:EPD), which is low risk thanks to its strong balance sheet and cash flow metrics. Brick-and-mortar retailers may not seem like low-risk investments given the growing threat from e-commerce, but Wal-Mart (NYSE:WMT) is an exception. You might think the last place to look for a low-risk stock would be the biotech sector, but I can't help thinking that at today's prices, biotech giant Gilead Sciences (NASDAQ:GILD) qualifies.
Source: Motley Fool
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