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The Zacks Analyst Blog Highlights: Procter & Gamble, Kimberly-Clark and Chesapeake Utilities

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For Immediate Release

Chicago, IL – August 16, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Procter & Gamble (PG - Free Report) , Kimberly-Clark (KMB - Free Report) and Chesapeake Utilities (CPK - Free Report) .

Here are highlights from Thursday’s Analyst Blog:

Bond Yield Curve Inverts: 3 Defensive Stocks to Buy

The U.S. bond market has indicated what some people believe to be the biggest warning of an upcoming recession. The spread between the 2-year treasury yield and the 10-year yield inverted, with the 2-year yield climbing higher than the benchmark 10-year yield for the first time since 2007.

On top of that, the U.S. 30-year bond yield fell to a record low early Wednesday, dropping down to 2.105% for the first time ever. Bond yield drops were not exclusive to the U.S., yields across Europe fell with the German 10-year bund reaching a new low of -0.65%. Strategists believe that a yield curve must stay inverted for it to truly signal a recession. Therefore, current bond yields are cause for concern only if they remain inverted. An inverted bond yield curve has been a reliable indicator of economic contractions but it does not always precede a recession.

With some bond yields at all-time lows amid broader economic uncertainty, investors have turned toward defensive stocks. Let’s take a closer look at a few stocks that can perform well during global economic uncertainty.  

Procter & Gambleis part of the consumer staples industry that is often seen as a relatively defensive move during market unpredictability. PG is a Zacks Rank #2 (Buy) right now and its shares have climbed 27.7% in 2019, with the broader soaps and cosmetics market trailing close behind, up 20%.

PG had a solid Q4 2019, beating earnings and revenue estimates by 3.77% and 1.31%, respectively. Furthermore, both revenue and earnings grew Y/Y in Q4. Zacks Consensus estimates project PG’s growth to continue in Q1 2019 with earnings projected to climb 10.71% and revenue to pop 4.82% to $17.49 billion. Furthermore, estimate revisions have ticked favorably in the right direction for PG as the chart below shows. 

Kimberly-Clarkis another consumer staples stock that has had a strong year, with KMB stock up 22%. The company operates some of the most recognizable personal care brands such as: Huggies, Pull-Ups, Kleenex, and Scott. Kimberly-Clark continued its strong 2019 with a second-quarter earnings beat that saw its EPS jump 5% to $1.67 per share.

KMB also raised its full-year earnings outlook to $6.65-$6.80, up from management’s previous estimate of $6.50-$6.70. Consensus estimates calls for KMB to sustain this bottom-line growth in Q3 with a jump of 4.68% to $1.79 on the back of 2.02% higher sales that would see it reach to $4.67 billion. Positive top and bottom-line growth is projected through 2020 and Kimberly-Clark sports a Zacks Rank #2 (Buy).

Chesapeake Utilitiesis a utility company engaged in natural gas distribution and transmission. Utilities are generally more stable stocks as the demand for electricity and gas often remains constant despite broader economic conditions. Utilities companies are also non-cyclical and don’t often move with larger market trends. CPK has a beta of 0.24 and pays out a quarterly dividend of $1.62, with a yield of 1.75% at the moment.

Chesapeake’s quarterly dividend paired with its low volatility can provide investors with a secure defensive investment. Consensus estimates also forecast CPK’s bottom-line to spike 5.88%, while sales surge 21.33% to $170.2 million in Q3. Looking ahead to the company’s full fiscal year outlook, estimates call for earnings to pop 12.39% to $3.72 and revenue to grow 6.95% to $767.37 million. Like its defensive peers, CPK is Zacks Rank #2 (Buy) at the moment.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Chesapeake Utilities Corporation (CPK) - free report >>

Kimberly-Clark Corporation (KMB) - free report >>

Procter & Gamble Company (The) (PG) - free report >>