3 top-notch stocks that offer defense
IIn a quick turn of events, the market took a hit this week after experiencing its strongest rally of 2022. It’s no secret that volatility has been the market’s headline since the start of the year, leaving frustrated investors uncertain of what’s on the horizon. .
No one has a magic crystal ball that can accurately predict where things are going, but what we do know is that growth stocks generally carry a higher level of risk when market sentiment turns south. Just yesterday, the tech-heavy Nasdaq slid more than 2%, while the Dow was down around 0.40%.
Buying popular and innovative high-growth stocks is a very aggressive style of investing that has rewarded investors with considerable gains over the past few years. However, in a volatile environment, blue chip stocks offer a much higher level of defense, and that’s what we’re here to look at today.
I’ve selected three blue-chip stocks that I think will give your portfolio a defensive boost amid volatility and a hazy market outlook. All three are very well-known companies with a stellar track record of excellence over decades in the market.
Tyson Foods, Inc.
Located in Arkansas and residing in the consumer staples industry, Tyson Foods Inc. TSN produces, distributes and markets beef, chicken, pork and prepared foods. Companies in this industry generate consistent and reliable revenue due to persistent demand for their products.
Dividends are a big benefit of blue chip stocks, and TSN has covered that with its annual dividend yield of 2.02% and a sustainable payout ratio of 20%. Additionally, the Protein King has increased its dividend five times in the past five years, earning it a remarkable five-year annualized dividend growth rate of 15%.
Tyson’s revenue has shown steady growth over the past decade, increasing 45% since 2013. From 2020 to 2021, revenue has climbed nearly 9% to $47 billion, and the three vital revenue streams for Tyson – chicken, beef and pork – also saw tremendous revenue growth, increasing by 4%, 14% and 22%, further showing the continued demand for Tyson products.
TSN’s next earnings report is expected to be released on May 9.and, and pay attention, as Zacks’ consensus estimate of $1.91 per share reflects a massive 43% year-over-year increase. Additionally, the company has an average EPS surprise of 32% across its last four quarterly reports, and in its latest quarter, Tyson beat earnings estimates by a notable 50%.
The company’s strategy is to sustainably feed the world with the fastest growing protein brands. It introduced a new three-pillar productivity program in fiscal year 2022 that is on track to deliver productivity savings of $300 million to $400 million, and that’s worth noting. With established operations, a sustainable dividend payout ratio, and ever-persistent demand for its products, Tyson is an outstanding stock that offers valuable defense in a volatile market. TSN is currently a Zacks Rank #1 (Strong Buy).
Tyson Foods, Inc. Price, Consensus, and EPS Surprise
Tyson Foods, Inc. price-consensus-eps-surprise-chart | Quote from Tyson Foods, Inc.
The Coca-Cola Company
The Coca-Cola Company KO is the largest beverage company in the world. In addition to its namesake Coca-Cola drinks, a few of its household names include Fanta, Minute Maid juices, Powerade and Dasani. Coca-Cola is part of the Zacks soft drink industry.
Not only is Coca-Cola a dividend aristocrat, it’s also a dividend king; 2022 marks the 60and consecutive increase in the company’s annual dividend. KO has a 2.8% dividend yield with a 72% earnings payout ratio, and the company has a five-year annualized dividend growth rate of 3.09%.
The beverage retailer’s revenue has climbed 17% from 2020 to 2021, and overall revenue has increased nearly 13% since 2018. Its main source of revenue comes from its North American operations. , a segment that saw its net sales increase by 15%. from 2020 to 2021. In addition, the net turnover of its bottling activity also saw a nice increase, up 14% over the same period.
In its most recent quarter, KO beat the EPS estimate of $0.40 by 12% and reported earnings of $0.45 per share. For its next earnings report on April 25and, Zacks’ consensus estimate of $0.57 per share reflects a respectable 3.6% year-over-year increase, and across its last four quarterly reports, Coca-Cola has a surprise average EPS of 13.5%. Additionally, Zacks Consensus’ current year sales estimate reflects year-over-year revenue growth of nearly 9%.
Coca-Cola’s mission is to refresh the world in mind, body and spirit while inspiring moments of optimism and happiness through its brands and actions. By being a dividend king and an aristocrat, KO has fully established itself as a long-term company that has proven itself in the market throughout history. The company is currently ranked Zacks Rank #3 (Hold).
The CocaCola Company The Price, Consensus, and EPS Surprise
CocaCola Company The price-consensus-eps-surprise-chart | CocaCola Company The Quote
Exxon Mobil XOM is a United States-based oil and gas company that is one of the largest publicly traded energy companies in the world. Exxon Mobil has been around since 1999 when Exxon Corporation and Mobil Corporation merged.
Like TSN and KO, Exxon Mobil also likes to reward shareholders via dividends. The oil giant has an annual dividend yield of 4.2% and a dividend payout ratio of 65% of earnings. Over the past five years, the company has increased its dividend four times and has a five-year annualized dividend growth rate of 3.1%.
XOM revenue soared nearly 60% from 2020 to 2021, and overall revenue is up 17% since 2017. Soaring energy prices have helped XOM shares to to rise 40% year-to-date, easily outpacing the S&P 500. Additionally, I believe XOM will continue to benefit from soaring energy prices in the near term as the war between Russia and the Ukraine persists and unfolds.
Notably, XOM publishes its next quarterly results on April 29.and, and pay attention to this one, as Zacks’ consensus estimate of $2.03 per share reflects a massive 212% year-over-year increase. In its most recent quarter, the oil and gas giant beat the EPS estimate of $1.96 by almost 5% and has a four-quarter average EPS surprise of a respectable 6%.
The company forecast exceptional earnings growth, a high dividend yield supported by healthy finances and clear demand for its products and services. These are all reasons why I think XOM is a terrific defensive play. The company is currently ranked Zacks Rank #3 (Hold).
Exxon Mobil Corporation price, consensus and EPS surprise
Exxon Mobil Corporation price-consensus-eps-surprise-chart | Quote Exxon Mobil Corporation
7 best stocks for the next 30 days
Just Released: Experts distill 7 elite stocks from the current Zacks No. 1 Ranking 220 Strong Buys list. They consider these tickers “most likely for early price increases.”
Since 1988, the full list has beaten the market more than 2 times with an average gain of +25.4% per year. So be sure to give these handpicked 7 your immediate attention.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.