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4 Low-Beta Defensive Stocks to Buy as Consumer Confidence Plummets
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Key Takeaways
U.S. consumer confidence fell to 89.1 in December as worries over jobs and income mounted.
Low-beta utility and consumer staples stocks are favored as market volatility rises and tech loses momentum.
ATO, AWR, SRE and INGR offer defensive exposure with dividends and betas below the broader market.
The Santa Claus rally appears to be losing its steam in the final days of 2025. All major indexes ended in the red on the opening day of the final trading week of the year. The declines come amid a massive tech selloff and some not-so-encouraging economic data.
Fresh economic data showed that consumer confidence fell further in December, as consumers are getting increasingly concerned about jobs and income amid a weakening economy.
Given this situation, investors may want to focus on low-beta, defensive stocks — especially from the utility and consumer staples sector — to help cushion against market swings. These companies are: Atmos Energy Corporation (ATO - Free Report) , American States Water Company (AWR - Free Report) , Sempra (SRE - Free Report) and Ingredion Incorporated (INGR - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These stocks are from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank.
Consumer Confidence Plummets
The Conference Board said last week that consumer confidence in the United States fell to 89.1 in December, declining 3.8 points from November’s reading of 92.9. The Present Situation Index, a gauge of the consumers' assessment of current business and labor market conditions, also fell 9.5 points to 116.8 in December.
The Expectations Index, a gauge of consumers' short-term outlook for income, business and labor market conditions, remained unchanged at 70.7 in December. However, the index has now remained below the 80 mark for 11 straight months. Any reading below the threshold of 80 indicates a recession in the coming days.
The decline comes amid growing concerns over a shrinking labor market and income amid a slowing economy. The Federal Reserve cut interest rates by 25 basis points three times this year.
However, the Federal Reserve has also indicated just one rate cut next year as high inflation remains a challenge for the central bank. Also, the tech rally, which had been driving the broader market has lately lost steam, with investors offloading tech stocks amid concerns over the profitability against the sky-high valuations of AI stocks.
4 Low-Beta Defensive Stocks With Upside
Atmos Energy Corporation
Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energyoperates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 6.7% for next year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. Atmos Energy has a beta of 0.75 and a current dividend yield of 2.38%.
American States Water Company
American States Water Company, along with its subsidiaries, provides fresh water, wastewater services and electricity to its customers in the United States. AWR principally works through its two major subsidiaries — Golden State Water Company and American States Utility Services.
American States Water Company has an expected earnings growth rate of 5.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 60 days. American States Water Company has a beta of 0.70 and a current dividend yield of 2.76%.
Sempra
Sempra is involved in the sale, distribution, storage and transportation of electricity and natural gas. Formed in 1998, SRE also invests in, develops and operates energy infrastructure.
Sempra has an expected earnings growth rate of 12.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. SRE presently carries a Zacks Rank #2. Sempra has a beta of 0.73 and a current dividend yield of 2.91%.
Ingredion Incorporated
Ingredion Incorporated is an ingredients solution provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion’s expected earnings growth rate for next year is 1.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. INGR has a beta of 0.72 and a current dividend yield of 2.94%.
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4 Low-Beta Defensive Stocks to Buy as Consumer Confidence Plummets
Key Takeaways
The Santa Claus rally appears to be losing its steam in the final days of 2025. All major indexes ended in the red on the opening day of the final trading week of the year. The declines come amid a massive tech selloff and some not-so-encouraging economic data.
Fresh economic data showed that consumer confidence fell further in December, as consumers are getting increasingly concerned about jobs and income amid a weakening economy.
Given this situation, investors may want to focus on low-beta, defensive stocks — especially from the utility and consumer staples sector — to help cushion against market swings. These companies are: Atmos Energy Corporation (ATO - Free Report) , American States Water Company (AWR - Free Report) , Sempra (SRE - Free Report) and Ingredion Incorporated (INGR - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These stocks are from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank.
Consumer Confidence Plummets
The Conference Board said last week that consumer confidence in the United States fell to 89.1 in December, declining 3.8 points from November’s reading of 92.9. The Present Situation Index, a gauge of the consumers' assessment of current business and labor market conditions, also fell 9.5 points to 116.8 in December.
The Expectations Index, a gauge of consumers' short-term outlook for income, business and labor market conditions, remained unchanged at 70.7 in December. However, the index has now remained below the 80 mark for 11 straight months. Any reading below the threshold of 80 indicates a recession in the coming days.
The decline comes amid growing concerns over a shrinking labor market and income amid a slowing economy. The Federal Reserve cut interest rates by 25 basis points three times this year.
However, the Federal Reserve has also indicated just one rate cut next year as high inflation remains a challenge for the central bank. Also, the tech rally, which had been driving the broader market has lately lost steam, with investors offloading tech stocks amid concerns over the profitability against the sky-high valuations of AI stocks.
4 Low-Beta Defensive Stocks With Upside
Atmos Energy Corporation
Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energyoperates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.
Atmos Energy has an expected earnings growth rate of 6.7% for next year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. Atmos Energy has a beta of 0.75 and a current dividend yield of 2.38%.
American States Water Company
American States Water Company, along with its subsidiaries, provides fresh water, wastewater services and electricity to its customers in the United States. AWR principally works through its two major subsidiaries — Golden State Water Company and American States Utility Services.
American States Water Company has an expected earnings growth rate of 5.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 60 days. American States Water Company has a beta of 0.70 and a current dividend yield of 2.76%.
Sempra
Sempra is involved in the sale, distribution, storage and transportation of electricity and natural gas. Formed in 1998, SRE also invests in, develops and operates energy infrastructure.
Sempra has an expected earnings growth rate of 12.1% for next year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. SRE presently carries a Zacks Rank #2. Sempra has a beta of 0.73 and a current dividend yield of 2.91%.
Ingredion Incorporated
Ingredion Incorporated is an ingredients solution provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.
Ingredion’s expected earnings growth rate for next year is 1.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days. INGR has a beta of 0.72 and a current dividend yield of 2.94%.