Risk and reward are two sides of the same coin. When investing, you can't just focus on the rewards while blatantly ignoring the risks associated with obtaining them. Legendary value investor Benjamin Graham discussed the concept of "margin of safety" in his book The Intelligent Investor. In a nutshell, he was saying that investors need to ensure they have their risks covered so that their investments can enjoy "safety of principal and a satisfactory return."

In thinking about the concept of risk, it's pertinent to look at the company's track record of growth, its ability to handle crises over the years, its competitive position and market share, and management's capability in allocating capital. Companies that can manage the above well qualify as being "low-risk." Such stocks are normally blue-chip companies with a strong brand name and face little to no chance of going belly-up. Not only do they exhibit steady growth over the years, but they might pay an increasing dividend as well.

Here are three stocks that are suitable for investors with a low risk appetite.

Lady smiling while tapping on tablet computer

Image source: Getty Images.

Apple

Apple (NASDAQ:AAPL) has established itself as a market leader in the smartphone space, with its iconic iPhone entering its fourteenth iteration this fall. Besides iPhones, the technology giant also sells a variety of products such as tablets (iPad), smartwatches (Apple Watch), and desktop computers (iMac). Apple also offers a wide variety of services such as Apple Pay and Apple TV to customers.

The company has just announced a record quarter in its fiscal third-quarter earnings report, with sales growth recorded for every category. A bright spot is the continued growth in Services revenue, up 15% year over year and making up 22% of total revenue for the quarter, up from 21.3% a year ago. The division enjoys subscription-based, recurring income and sports a gross profit margin exceeding 60%. Apple paid out a split-adjusted dividend of $0.59 for the first nine months of 2020, up nearly 6% year over year from $0.5575. 

Apple had just announced its new iPhone 12 and iPhone 12 mini, and aside from the usual new features that come with an iPhone upgrade, this time the new phones come equipped with 5G technology embedded in them. The company also concurrently unveiled its iPhone 12 Pro and iPhone 12 Pro Max, for a total of four brand-new smartphones. The pro models are water-resistant for up to six meters and are protected against liquid spillages too.

Visa

If you've ever swiped a debit or credit card at a merchant's shop when making a purchase, then you're probably familiar with Visa (NYSE:V). The financial services giant had around 3.5 billion cards in issue as of March 31, 2020, and handled payments volume of $1.9 trillion in just its last quarter alone.

Visa's business was negatively affected by the COVID-19 pandemic, as the company reported a 17% year-over-year decline in revenue for the quarter ended June 30. However, there are signs that the situation is gradually improving, with U.S. payment volumes rising close to 10% year over year in the July 1-21 period, up significantly from April's 30% year-over-year decline. Visa's brand name and global presence should stand it in good stead to recover strongly once this crisis has passed. The company continued to declare a dividend of $0.30 per quarter, a 20% year-over-year jump from the $0.25 it paid out last year.

The company continues to expand its partnerships to widen its customer reach, with the latest being a tie-up with Paypal (NASDAQ:PYPL) to enable real-time access to funds for customers through Visa Direct payout services using a suite of the latter's digital wallets. This program will roll out in the next few months, with both companies hoping to tap new use cases and to reach out to new customers around the globe.

Starbucks

As you weave through the morning rush hour on your way to work, you'll probably stop by a Starbucks (NASDAQ:SBUX) outlet to grab a hot latte before heading to the office. The coffee chain is ubiquitous in the U.S. and many parts of the world, with 18,000-plus outlets in the U.S. alone and another close to 14,000 located internationally.

The company had to temporarily shutter the majority of its stores as the coronavirus swept across the world from January till June, but as of July, around 97% of global company-operated stores had reopened, albeit with modified store hours and limited seating due to safe distancing requirements. Starbucks has modified its stores to increase contactless experiences for its customers by including drive-thru, pick-up with mobile ordering, and pay and deliver. CEO Kevin Johnson has highlighted how Starbucks has leveraged its digital platform to continue to accept orders for pick-up and go, thus keeping revenue flowing even as more people telecommute. As digital acceleration picks up pace in China, the company's largest growth market, Starbucks is poised to deliver consistent growth again for investors.

Starbucks has continued to pay an increasing dividend over the years, with the company maintaining a quarterly pay-out of $0.41 per share versus $0.36 last year, an increase of 14% year over year.