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3 Defensive-Styled Stocks to Help Weather Volatility
Key Takeaways
Volatility has ticked higher amid higher oil prices and rising treasury yields weighing on sentiment.
Companies with consistent demand patterns can help weather volatility.
ADM, CTAS, and SYY all currently fit the defensive criteria, with each also seeing favorable EPS revisions.
Volatility has picked up considerably in recent sessions, with higher Treasury yields, rising energy prices, and weakness across parts of the AI trade, weighing on sentiment.
Defensive-styled stocks can be attractive for riding out longer-term volatility, as these companies generally benefit from steadier demand trends, making their businesses less sensitive to swings in the broader economic environment.
Cintas (CTAS - Free Report) , Sysco (SYY - Free Report) , and Archer Daniels Midland (ADM - Free Report) all fit the criteria, with each also seeing positive EPS revisions.
Cintas Remains Operationally Steady
Cintas, a current Zacks Rank #2 (Buy), provides uniforms, facility services, first aid and safety products, and fire protection services to businesses. Its offerings provide a defensive quality, as companies consistently need clean uniforms, restroom supplies, safety products, and other products that it provides.
Resilience has continued to show up in its results, with revenue in its latest quarter climbing 8.9% YoY to $2.9 billion, while its gross margin remained at an all-time high.
Image Source: Zacks Investment Research
The stock is currently a Zacks Rank #2 (Buy), with EPS revisions for its current and next fiscal years remaining on a favorable trend. The overall combination of recurring demand and steady growth makes it an attractive consideration during volatile periods.
Image Source: Zacks Investment Research
Sysco Sports Favorable Growth Outlook
Sysco is the global leader in selling and distributing food and related products to customers who prepare meals away from home. Its customer base includes restaurants, healthcare facilities, educational facilities, and lodging establishments.
Food demand brings obvious defensive qualities, and Sysco’s broad customer base adds another layer of stability. Its latest results remained constructive, with Q4 sales climbing 4.7% YoY and U.S. Foodservice volume rising 2.5%.
The company also guided for 6-7% sales growth and 9-11% adjusted EPS growth for FY27, providing a favorable growth backdrop as both quarterly and annual EPS revisions remain on a bullish trajectory.
Image Source: Zacks Investment Research
Keep in mind that Sysco recently issued a $1 billion common stock offering to help finance its massive $29.1 billion acquisition of Jetro Restaurant Depot, though its overall longer-term defensive nature still remains intact.
Archer Daniels Midland Raises Guidance
Archer Daniels Midland is one of the world’s largest agricultural processors, handling crops and producing ingredients used throughout the food, beverage, animal nutrition, and energy industries.
Its positioning across the global food supply chain gives the business strong defensive qualities, as demand for agricultural products and food ingredients generally remains resilient across varying economic environments.
ADM posted adjusted EPS of $1.84 in its latest quarter, nearly doubling from the same period last year, while management also raised its full-year earnings guidance following the strong results.
EPS revisions for its current and next fiscal years have shifted bullishly since February, with the stock currently a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Bottom Line
Recent volatility has given investors several reasons to consider more defensive-styled stocks, with higher yields, rising energy prices, and weakness across several high-growth areas of the market all weighing on sentiment.
For those looking to increase a portfolio's defensive capabilities, Cintas (CTAS - Free Report) , Sysco (SYY - Free Report) , and Archer Daniels Midland (ADM - Free Report) could all be considerations.
All three benefit from relatively resilient demand profiles, while favorable EPS revisions provide a solid fundamental base.
View the Zacks #1 Rank List
Image: Bigstock
3 Defensive-Styled Stocks to Help Weather Volatility
Key Takeaways
Volatility has picked up considerably in recent sessions, with higher Treasury yields, rising energy prices, and weakness across parts of the AI trade, weighing on sentiment.
Defensive-styled stocks can be attractive for riding out longer-term volatility, as these companies generally benefit from steadier demand trends, making their businesses less sensitive to swings in the broader economic environment.
Cintas (CTAS - Free Report) , Sysco (SYY - Free Report) , and Archer Daniels Midland (ADM - Free Report) all fit the criteria, with each also seeing positive EPS revisions.
Cintas Remains Operationally Steady
Cintas, a current Zacks Rank #2 (Buy), provides uniforms, facility services, first aid and safety products, and fire protection services to businesses. Its offerings provide a defensive quality, as companies consistently need clean uniforms, restroom supplies, safety products, and other products that it provides.
Resilience has continued to show up in its results, with revenue in its latest quarter climbing 8.9% YoY to $2.9 billion, while its gross margin remained at an all-time high.
Image Source: Zacks Investment Research
The stock is currently a Zacks Rank #2 (Buy), with EPS revisions for its current and next fiscal years remaining on a favorable trend. The overall combination of recurring demand and steady growth makes it an attractive consideration during volatile periods.
Image Source: Zacks Investment Research
Sysco Sports Favorable Growth Outlook
Sysco is the global leader in selling and distributing food and related products to customers who prepare meals away from home. Its customer base includes restaurants, healthcare facilities, educational facilities, and lodging establishments.
Food demand brings obvious defensive qualities, and Sysco’s broad customer base adds another layer of stability. Its latest results remained constructive, with Q4 sales climbing 4.7% YoY and U.S. Foodservice volume rising 2.5%.
The company also guided for 6-7% sales growth and 9-11% adjusted EPS growth for FY27, providing a favorable growth backdrop as both quarterly and annual EPS revisions remain on a bullish trajectory.
Image Source: Zacks Investment Research
Keep in mind that Sysco recently issued a $1 billion common stock offering to help finance its massive $29.1 billion acquisition of Jetro Restaurant Depot, though its overall longer-term defensive nature still remains intact.
Archer Daniels Midland Raises Guidance
Archer Daniels Midland is one of the world’s largest agricultural processors, handling crops and producing ingredients used throughout the food, beverage, animal nutrition, and energy industries.
Its positioning across the global food supply chain gives the business strong defensive qualities, as demand for agricultural products and food ingredients generally remains resilient across varying economic environments.
ADM posted adjusted EPS of $1.84 in its latest quarter, nearly doubling from the same period last year, while management also raised its full-year earnings guidance following the strong results.
EPS revisions for its current and next fiscal years have shifted bullishly since February, with the stock currently a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Bottom Line
Recent volatility has given investors several reasons to consider more defensive-styled stocks, with higher yields, rising energy prices, and weakness across several high-growth areas of the market all weighing on sentiment.
For those looking to increase a portfolio's defensive capabilities, Cintas (CTAS - Free Report) , Sysco (SYY - Free Report) , and Archer Daniels Midland (ADM - Free Report) could all be considerations.
All three benefit from relatively resilient demand profiles, while favorable EPS revisions provide a solid fundamental base.