We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Blue-Chip Stocks to Boost Your Portfolio's Defense
Read MoreHide Full Article
Volatility has dominated the market this year, leaving investors frustrated and unsure of what lies ahead. During these times of heightened volatility, it is advantageous for investors to have an additional layer of defense injected into their portfolios.
So, how can investors blend defense into their portfolios?
One excellent option is targeting blue-chip stocks.
Blue-chip stocks are companies that have consistently provided quality, reliability, and the ability to operate profitably in both good and bad times. In addition, they generally carry rock-solid dividend metrics.
Simply put, these companies know how to make money.
And they’ve been great at doing so throughout their history.
Three top-ranked blue-chip stocks – The Kroger Co. (KR - Free Report) , Humana (HUM - Free Report) , and American Express (AXP - Free Report) – would all be excellent considerations for investors in a historically-volatile 2022.
Below is a chart illustrating the share performance of all three companies YTD, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Pairing the powerful Zacks Rank with a long-established track record of success is undoubtedly a beautiful duo that instills a high level of confidence moving forward.
Let’s take a deeper dive into each one.
The Kroger Co.
Kroger, a long-time retailer residing in the thin-margin grocery industry, operates approximately 2,700 retail stores under its various banners and divisions in 35 states.
Analysts have upped their earnings outlook across the board over the last several months, helping push the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In addition to a favorable near-term earnings outlook, Kroger shares are cheap; the company’s current 10.9X forward earnings multiple is well below its 12.6X five-year median and reflects an enticing 53% discount relative to its Zacks Retail and Wholesale sector.
Image Source: Zacks Investment Research
KR sports a Style Score of an A for Value.
For the cherry on top, Kroger’s dividend metrics would excite any income-focused investor – the company’s annual dividend yields a respectable 2.4% paired with a sustainable payout ratio at 21% of earnings.
Even more impressive, the company has upped its dividend payout five times over the last five years, translating to a double-digit 13.2% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
American Express
American Express is a diversified financial services company offering charge and credit payment card products and travel-related services worldwide. AXP currently sports a Zacks Rank #2 (Buy).
Analysts have been bullish across nearly all timeframes over the last several months.
Image Source: Zacks Investment Research
AXP shares have become notably cheap in 2022 – the company’s 13.9X forward P/E ratio sits well below its five-year median of 15.7X and 2021 highs of 23.3X.
American Express carries a Style Score of a B for Value.
Image Source: Zacks Investment Research
AXP’s annual dividend yield of 1.5% is visibly lower than its Zacks Sector average of 2.6%, but the company’s 7.2% five-year annualized dividend growth rate helps to pick up the slack.
Further, the company has upped its dividend payout three times over the last five years.
Image Source: Zacks Investment Research
Humana
Humana is a health care plan provider in the United States, providing health insurance benefits under Health Maintenance Organization, Private Fee-For-Service, and Preferred Provider Organization plans.
Like AXP and KR, Humana has enjoyed positive earnings estimate revisions over the last several months, pushing it into a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Humana has a stellar growth profile – the Zacks Consensus EPS Estimate of $25.01 for the company’s current fiscal year (FY22) suggests Y/Y earnings growth of a double-digit 21.2%.
And in FY23, estimates call for an additional 12% of bottom line growth.
The forecasted earnings growth comes on top of projected revenue increases of 11.8% and 9% in FY22 and FY23, respectively.
Image Source: Zacks Investment Research
Humana’s annual dividend yield of 0.6% is undoubtedly on the lower end of the spectrum, well below its Zacks Medical sector average of 1.6%.
However, Humana’s dividend growth is impossible to ignore; HUM has upped its dividend payout six times over the last five years, paired with a stellar 23.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
It goes without saying that deploying a heavier defensive approach in 2022 is more than valid.
The Fed's ongoing tightening cycle, paired with geopolitical uncertainties and lingering COVID-19 restrictions, has caused many stocks to pull back significantly in 2022.
However, blue-chip stocks weather a dark fiscal cloud better than most.
All three stocks above – The Kroger Co. (KR - Free Report) , Humana (HUM - Free Report) , and American Express (AXP - Free Report) – would all be excellent considerations for investors in a historically-volatile 2022.
All three carry a favorable Zacks Rank paired with a fully established nature through years and years of successful business operations.
For the cherry on top, they also reward their shareholders handsomely through their dividend payouts, further cushioning drawdowns in other positions.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
3 Blue-Chip Stocks to Boost Your Portfolio's Defense
Volatility has dominated the market this year, leaving investors frustrated and unsure of what lies ahead. During these times of heightened volatility, it is advantageous for investors to have an additional layer of defense injected into their portfolios.
So, how can investors blend defense into their portfolios?
One excellent option is targeting blue-chip stocks.
Blue-chip stocks are companies that have consistently provided quality, reliability, and the ability to operate profitably in both good and bad times. In addition, they generally carry rock-solid dividend metrics.
Simply put, these companies know how to make money.
And they’ve been great at doing so throughout their history.
Three top-ranked blue-chip stocks – The Kroger Co. (KR - Free Report) , Humana (HUM - Free Report) , and American Express (AXP - Free Report) – would all be excellent considerations for investors in a historically-volatile 2022.
Below is a chart illustrating the share performance of all three companies YTD, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Pairing the powerful Zacks Rank with a long-established track record of success is undoubtedly a beautiful duo that instills a high level of confidence moving forward.
Let’s take a deeper dive into each one.
The Kroger Co.
Kroger, a long-time retailer residing in the thin-margin grocery industry, operates approximately 2,700 retail stores under its various banners and divisions in 35 states.
Analysts have upped their earnings outlook across the board over the last several months, helping push the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
In addition to a favorable near-term earnings outlook, Kroger shares are cheap; the company’s current 10.9X forward earnings multiple is well below its 12.6X five-year median and reflects an enticing 53% discount relative to its Zacks Retail and Wholesale sector.
Image Source: Zacks Investment Research
KR sports a Style Score of an A for Value.
For the cherry on top, Kroger’s dividend metrics would excite any income-focused investor – the company’s annual dividend yields a respectable 2.4% paired with a sustainable payout ratio at 21% of earnings.
Even more impressive, the company has upped its dividend payout five times over the last five years, translating to a double-digit 13.2% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
American Express
American Express is a diversified financial services company offering charge and credit payment card products and travel-related services worldwide. AXP currently sports a Zacks Rank #2 (Buy).
Analysts have been bullish across nearly all timeframes over the last several months.
Image Source: Zacks Investment Research
AXP shares have become notably cheap in 2022 – the company’s 13.9X forward P/E ratio sits well below its five-year median of 15.7X and 2021 highs of 23.3X.
American Express carries a Style Score of a B for Value.
Image Source: Zacks Investment Research
AXP’s annual dividend yield of 1.5% is visibly lower than its Zacks Sector average of 2.6%, but the company’s 7.2% five-year annualized dividend growth rate helps to pick up the slack.
Further, the company has upped its dividend payout three times over the last five years.
Image Source: Zacks Investment Research
Humana
Humana is a health care plan provider in the United States, providing health insurance benefits under Health Maintenance Organization, Private Fee-For-Service, and Preferred Provider Organization plans.
Like AXP and KR, Humana has enjoyed positive earnings estimate revisions over the last several months, pushing it into a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Humana has a stellar growth profile – the Zacks Consensus EPS Estimate of $25.01 for the company’s current fiscal year (FY22) suggests Y/Y earnings growth of a double-digit 21.2%.
And in FY23, estimates call for an additional 12% of bottom line growth.
The forecasted earnings growth comes on top of projected revenue increases of 11.8% and 9% in FY22 and FY23, respectively.
Image Source: Zacks Investment Research
Humana’s annual dividend yield of 0.6% is undoubtedly on the lower end of the spectrum, well below its Zacks Medical sector average of 1.6%.
However, Humana’s dividend growth is impossible to ignore; HUM has upped its dividend payout six times over the last five years, paired with a stellar 23.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
It goes without saying that deploying a heavier defensive approach in 2022 is more than valid.
The Fed's ongoing tightening cycle, paired with geopolitical uncertainties and lingering COVID-19 restrictions, has caused many stocks to pull back significantly in 2022.
However, blue-chip stocks weather a dark fiscal cloud better than most.
All three stocks above – The Kroger Co. (KR - Free Report) , Humana (HUM - Free Report) , and American Express (AXP - Free Report) – would all be excellent considerations for investors in a historically-volatile 2022.
All three carry a favorable Zacks Rank paired with a fully established nature through years and years of successful business operations.
For the cherry on top, they also reward their shareholders handsomely through their dividend payouts, further cushioning drawdowns in other positions.