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Defense Wins Ballgames; 3 Top Picks for a Defensive Approach
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I’m willing to bet many have heard the saying “defense wins ballgames” from an old coach or anybody with an interest in sports.
Of course, it doesn’t just apply to sports; investors can also use this ideology in their stock selection process.
Low-beta stocks can help strengthen a portfolio’s defense, as these stocks are less sensitive to the broader market’s movements.
And several of them, including – The Coca-Cola Company (KO - Free Report) , Walmart Inc. (WMT - Free Report) , and Procter & Gamble (PG - Free Report) – have seen their earnings outlooks shift positively over the last several months.
Below is a chart illustrating the performance of all three over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
On top of improved earnings outlooks, all three reward their shareholders via dividends. Let’s take a closer look at each one.
Walmart Inc.
Walmart, a titan in the retail space with an extensive product catalog, operates through various retail channels, including brick-and-mortar and an e-commerce platform. Currently, the company carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
WMT’s annual dividend yield currently stands at 1.5%, a few ticks above its Zacks Retail and Wholesale sector average. In addition, dividend growth is apparent; the company’s payout has grown by 2% over the last five years.
Image Source: Zacks Investment Research
Despite a challenging business environment, WMT has recently posted strong quarterly results, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in back-to-back quarters.
In its latest release, the retail titan reported earnings more than 13% above expectations and penciled in a 3.6% sales surprise.
Image Source: Zacks Investment Research
The Coca-Cola Company
The Coca-Cola Company is an American multinational corporation best known for its flagship Coca-Cola beverage. The company currently sports a Zacks Rank #2 (Buy).
Impressively, KO is a Dividend King, showing an unparalleled commitment to shareholders through 50+ consecutive years of increased dividend payouts.
The company’s annual dividend presently sits at 2.9%, modestly above its Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
Similar to WMT, Coca-Cola has consistently posted better-than-expected earnings, exceeding top and bottom line estimates in seven consecutive quarters.
In its latest release, Coca-Cola raised its organic revenue forecast for its current fiscal year, now expecting growth of 14% - 15% (previously 12% - 13%).
Image Source: Zacks Investment Research
Procter & Gamble
Procter & Gamble is a branded consumer products company that markets its products in more than 180 countries. Like the stocks above, PG’s earnings outlook has recently improved, pushing the stock into a Zacks Rank #2 (Buy).
The consumer staples titan rewards its shareholders via its annual dividend, currently yielding 2.4% paired with a payout ratio sitting at 63% of its earnings.
Image Source: Zacks Investment Research
Still, the company’s valuation multiples could steer away more value-conscious investors; currently, PG shares trade at a 25.7X forward earnings multiple, above the 23.9X five-year median and Zacks sector average.
PG carries a Style Score of “D” for Value.
Image Source: Zacks Investment Research
Bottom Line
Low-beta stocks are less sensitive to the market’s movements, helping provide investors with a valuable level of stability and defense.
And after a rough showing from the market in 2022, many are undoubtedly considering adding more defensive stocks to their portfolios.
All three low-beta stocks above – The Coca-Cola Company (KO - Free Report) , Walmart Inc. (WMT - Free Report) , and Procter & Gamble (PG - Free Report) – could be considerations for those looking to heighten their portfolio’s defense.
All three sport a favorable Zacks Rank and reward their shareholders, undoubtedly a strong pairing.
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Defense Wins Ballgames; 3 Top Picks for a Defensive Approach
I’m willing to bet many have heard the saying “defense wins ballgames” from an old coach or anybody with an interest in sports.
Of course, it doesn’t just apply to sports; investors can also use this ideology in their stock selection process.
Low-beta stocks can help strengthen a portfolio’s defense, as these stocks are less sensitive to the broader market’s movements.
And several of them, including – The Coca-Cola Company (KO - Free Report) , Walmart Inc. (WMT - Free Report) , and Procter & Gamble (PG - Free Report) – have seen their earnings outlooks shift positively over the last several months.
Below is a chart illustrating the performance of all three over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
On top of improved earnings outlooks, all three reward their shareholders via dividends. Let’s take a closer look at each one.
Walmart Inc.
Walmart, a titan in the retail space with an extensive product catalog, operates through various retail channels, including brick-and-mortar and an e-commerce platform. Currently, the company carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
WMT’s annual dividend yield currently stands at 1.5%, a few ticks above its Zacks Retail and Wholesale sector average. In addition, dividend growth is apparent; the company’s payout has grown by 2% over the last five years.
Image Source: Zacks Investment Research
Despite a challenging business environment, WMT has recently posted strong quarterly results, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in back-to-back quarters.
In its latest release, the retail titan reported earnings more than 13% above expectations and penciled in a 3.6% sales surprise.
Image Source: Zacks Investment Research
The Coca-Cola Company
The Coca-Cola Company is an American multinational corporation best known for its flagship Coca-Cola beverage. The company currently sports a Zacks Rank #2 (Buy).
Impressively, KO is a Dividend King, showing an unparalleled commitment to shareholders through 50+ consecutive years of increased dividend payouts.
The company’s annual dividend presently sits at 2.9%, modestly above its Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
Similar to WMT, Coca-Cola has consistently posted better-than-expected earnings, exceeding top and bottom line estimates in seven consecutive quarters.
In its latest release, Coca-Cola raised its organic revenue forecast for its current fiscal year, now expecting growth of 14% - 15% (previously 12% - 13%).
Image Source: Zacks Investment Research
Procter & Gamble
Procter & Gamble is a branded consumer products company that markets its products in more than 180 countries. Like the stocks above, PG’s earnings outlook has recently improved, pushing the stock into a Zacks Rank #2 (Buy).
The consumer staples titan rewards its shareholders via its annual dividend, currently yielding 2.4% paired with a payout ratio sitting at 63% of its earnings.
Image Source: Zacks Investment Research
Still, the company’s valuation multiples could steer away more value-conscious investors; currently, PG shares trade at a 25.7X forward earnings multiple, above the 23.9X five-year median and Zacks sector average.
PG carries a Style Score of “D” for Value.
Image Source: Zacks Investment Research
Bottom Line
Low-beta stocks are less sensitive to the market’s movements, helping provide investors with a valuable level of stability and defense.
And after a rough showing from the market in 2022, many are undoubtedly considering adding more defensive stocks to their portfolios.
All three low-beta stocks above – The Coca-Cola Company (KO - Free Report) , Walmart Inc. (WMT - Free Report) , and Procter & Gamble (PG - Free Report) – could be considerations for those looking to heighten their portfolio’s defense.
All three sport a favorable Zacks Rank and reward their shareholders, undoubtedly a strong pairing.