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5 Defensive Stocks to Buy as Consumer Confidence Hits 7-Month Low
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Key Takeaways
COCO, DAR, CNC, EXC and AMRX are highlighted as defensive stocks with upside.
COCO and CNC have expected current-year earnings growth of more than 64%.
DAR's earnings estimate rose 55.1%, while CNC's improved 40.9% over 60 days.
The confidence level of Americans hit rock bottom in August. Growing concerns over sky-high inflation and the labor market outlook have been dampening their sentiment. Also, concerns have lately grown that oil prices could rise further and result in higher inflation, on fears that tensions in the Middle East continue for a longer period.
Markets have remained volatile for most of July and August, and investors are yet to get a clear picture of the Federal Reserve’s monetary path ahead.
Given this scenario, we recommend buying five defensive stocks from the consumer staples, healthcare and utilities sectors, namely, The Vita Coco Company, Inc. (COCO - Free Report) , Darling Ingredients Inc. (DAR - Free Report) , Centene Corporation (CNC - Free Report) , Exelon Corporation (EXC - Free Report) and Amneal Pharmaceuticals, Inc.(AMRX - Free Report) .
Consumer Sentiment Hits a New Low
The Conference Board said on Tuesday that its consumer confidence index fell to 89.4 in August, the lowest level since January, from a downwardly revised 90.2 a month earlier. The August reading was also sharply lower than the consensus estimate of 90.2.
Concerns have been growing about the economy’s health, as investors remain worried about inflation. A surge in oil prices after the war broke out between the United States and Iran in February saw inflation jump again.
In July, the consumer price index (CPI) increased 0.1% sequentially, while the core CPI, which strips out volatile food and energy prices, rose 0.2% in July. Year over year, CPI declined to 3.4% from 3.5% in June. Core CPI came in at 2.5% year over year, down 0.1% from the previous month.
However, inflation remains sharply above the Fed’s 2% target. Also, the labor market outlook has been a cause of concern. The decline in consumer confidence in August was triggered by a sharp decline in the expectations index. The expectations index slid 7.8%, which overshadowed the first rise in the current situation index since April.
These uncertainties could keep markets volatile for a longer period.
4 Defensive Stocks With Upside
The Vita Coco Company
The Vita Coco Company, Inc. provides a beverage platform. COCO’s brands include coconut water, Vita Coco; clean energy drink Runa; sustainable enhanced water, Ever & Ever, and protein-infused water, PWR LIFT.
The Vita Coco Company’s expected earnings growth rate for the current year is 64.7%. The Zacks Consensus Estimate for current-year earnings has improved 11.4% over the past 60 days. COCO currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Darling Ingredients
Darling Ingredients Inc. is a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients. DAR serves customers across the pharmaceutical, food, pet food, animal feed, industrial, fuel, bioenergy and fertilizer markets.
Darling Ingredients’expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 55.1% over the past 60 days. DAR currently has a Zacks Rank #2 (Buy).
Centene Corporation
Centene Corporation is a well-diversified healthcare company that primarily provides a set of services to government-sponsored healthcare programs, while also serving under-insured and uninsured individuals through member-focused services. CNC is also engaged in providing education and outreach programs to inform and assist members in accessing quality, appropriate healthcare services. Centene operates a capitated managed-care model. Under this model, it receives a fixed payment per member per month from government programs such as Medicaid, Medicare and ACA Marketplace plans.
Centene Corporation has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 40.9% over the past 60 days. CNC currently carries a Zacks Rank #1.
Exelon Corporation
Exelon Corporation is focused solely on transmission and distribution operations. EXC will be serving more than 10 million customers through seven fully regulated transmission and distribution utilities — Atlantic City Electric Company, Baltimore Gas and Electric Company, Commonwealth Edison Company, Pepco Holdings LLC, Delmarva Power & Light Company, PECO Energy Company and Potomac Electric Power Company.
Exelon Corporation has an expected earnings growth rate of 3.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. EXC currently carries a Zacks Rank #2.
Amneal Pharmaceuticals
Amneal Pharmaceuticals, Inc. is a diversified, global biopharmaceutical company that develops, manufactures, markets and distributes a broad portfolio of essential medicines. AMRX operates principally in the United States, India and Ireland, with executive offices in Bridgewater, NJ. Its platform spans generics, injectables, biosimilars and branded specialty medications.
Amneal Pharmaceuticals has an expected earnings growth rate of 22.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the past 60 days. AMRX currently sports a Zacks Rank #1
View the Zacks #1 Rank List
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5 Defensive Stocks to Buy as Consumer Confidence Hits 7-Month Low
Key Takeaways
The confidence level of Americans hit rock bottom in August. Growing concerns over sky-high inflation and the labor market outlook have been dampening their sentiment. Also, concerns have lately grown that oil prices could rise further and result in higher inflation, on fears that tensions in the Middle East continue for a longer period.
Markets have remained volatile for most of July and August, and investors are yet to get a clear picture of the Federal Reserve’s monetary path ahead.
Given this scenario, we recommend buying five defensive stocks from the consumer staples, healthcare and utilities sectors, namely, The Vita Coco Company, Inc. (COCO - Free Report) , Darling Ingredients Inc. (DAR - Free Report) , Centene Corporation (CNC - Free Report) , Exelon Corporation (EXC - Free Report) and Amneal Pharmaceuticals, Inc.(AMRX - Free Report) .
Consumer Sentiment Hits a New Low
The Conference Board said on Tuesday that its consumer confidence index fell to 89.4 in August, the lowest level since January, from a downwardly revised 90.2 a month earlier. The August reading was also sharply lower than the consensus estimate of 90.2.
Concerns have been growing about the economy’s health, as investors remain worried about inflation. A surge in oil prices after the war broke out between the United States and Iran in February saw inflation jump again.
In July, the consumer price index (CPI) increased 0.1% sequentially, while the core CPI, which strips out volatile food and energy prices, rose 0.2% in July. Year over year, CPI declined to 3.4% from 3.5% in June. Core CPI came in at 2.5% year over year, down 0.1% from the previous month.
However, inflation remains sharply above the Fed’s 2% target. Also, the labor market outlook has been a cause of concern. The decline in consumer confidence in August was triggered by a sharp decline in the expectations index. The expectations index slid 7.8%, which overshadowed the first rise in the current situation index since April.
These uncertainties could keep markets volatile for a longer period.
4 Defensive Stocks With Upside
The Vita Coco Company
The Vita Coco Company, Inc. provides a beverage platform. COCO’s brands include coconut water, Vita Coco; clean energy drink Runa; sustainable enhanced water, Ever & Ever, and protein-infused water, PWR LIFT.
The Vita Coco Company’s expected earnings growth rate for the current year is 64.7%. The Zacks Consensus Estimate for current-year earnings has improved 11.4% over the past 60 days. COCO currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Darling Ingredients
Darling Ingredients Inc. is a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients. DAR serves customers across the pharmaceutical, food, pet food, animal feed, industrial, fuel, bioenergy and fertilizer markets.
Darling Ingredients’expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 55.1% over the past 60 days. DAR currently has a Zacks Rank #2 (Buy).
Centene Corporation
Centene Corporation is a well-diversified healthcare company that primarily provides a set of services to government-sponsored healthcare programs, while also serving under-insured and uninsured individuals through member-focused services. CNC is also engaged in providing education and outreach programs to inform and assist members in accessing quality, appropriate healthcare services. Centene operates a capitated managed-care model. Under this model, it receives a fixed payment per member per month from government programs such as Medicaid, Medicare and ACA Marketplace plans.
Centene Corporation has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 40.9% over the past 60 days. CNC currently carries a Zacks Rank #1.
Exelon Corporation
Exelon Corporation is focused solely on transmission and distribution operations. EXC will be serving more than 10 million customers through seven fully regulated transmission and distribution utilities — Atlantic City Electric Company, Baltimore Gas and Electric Company, Commonwealth Edison Company, Pepco Holdings LLC, Delmarva Power & Light Company, PECO Energy Company and Potomac Electric Power Company.
Exelon Corporation has an expected earnings growth rate of 3.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.4% over the last 60 days. EXC currently carries a Zacks Rank #2.
Amneal Pharmaceuticals
Amneal Pharmaceuticals, Inc. is a diversified, global biopharmaceutical company that develops, manufactures, markets and distributes a broad portfolio of essential medicines. AMRX operates principally in the United States, India and Ireland, with executive offices in Bridgewater, NJ. Its platform spans generics, injectables, biosimilars and branded specialty medications.
Amneal Pharmaceuticals has an expected earnings growth rate of 22.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% over the past 60 days. AMRX currently sports a Zacks Rank #1