These Hot Defensive Stocks Are Gaining Investors’ Attention Now
While tech stocks may be seeing increased activity, investors may want to consider defensive stocks in the stock market now. For the most part, this would be the case as the rate of economic recovery across the nation continues to decelerate this week. Earlier today, the weekly jobless claims in the U.S. unexpectedly rose to 373,000. This would indicate a slow down in the current job market recovery as the figure exceeds the Dow Jones estimate of 350,000. As reopening stocks fall, defensive names could continue to prosper despite the state of the economy. Because of this, I can understand if investors are eyeing top defensive stocks now.
Now, what are defensive stocks might you ask? Well, simply put, defensive stocks are often rooted in companies that offer more consistent returns over explosive equity gains. In this group, you have industry giants whose services are constantly in demand regardless of how the economy is doing. This can range from industrial names such as logistics firm Expeditors International (NASDAQ: EXPD) to essential food companies like General Mills (NYSE: GIS). Elsewhere, health care stocks like Walgreens Boots Alliance (NASDAQ: WBA) would be relevant amidst the pandemic as well. Given the current market conditions, some would argue that having more defensive plays in one’s portfolio would be a good move now. Should you agree with this, take a look at these four defensive stocks in focus in the stock market today.
Top Defensive Stocks To Buy [Or Sell] This Month
- Timken Company (NYSE: TKR)
- 3M Company (NYSE: MMM)
- Frontier Communications Parent Inc. (NASDAQ: FYBR)
- United Parcel Services Inc. (NYSE: UPS)
Timken Company
Timken is a global manufacturer of power transmission products and bearings. It focuses on growing its power transmission leadership and continues to expand its product portfolio. With over 120 years of experience, the company is a key contributor to keeping many industries in motion. TKR stock currently trades at $78.76 as of 12:31 p.m. ET and has risen by over 70% in valuation in the last year alone. Impressively, it has continued to achieve industry-leading growth in service to its wind energy customers over the last 5 years. In detail, it significantly outgrew this market sector by registering a compound annual growth rate of 17% compared to the estimated 7% for the industry.
In April, the company reported its first-quarter financials for 2021. Firstly, Timken posted record sales of $1.03 billion, up by 11% year-over-year. Secondly, the company also delivered strong earnings per diluted share of $1.47 or a net income of $113.3 million for the quarter. Unsurprisingly, this increase in sales was driven by organic growth across most end-market sectors led by renewable energy and off-highway. Given the excitement surrounding Timken, will you consider adding TKR stock to your portfolio?
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The 3M Company
3M is a multinational conglomerate corporation operating in the fields of industry, consumer goods, and health care. The company began as an abrasives manufacturer and has refined its technologies with breakthrough inventions impacting multiple 3M businesses today. It also creates game-changing adhesives and biomaterials. 3M has also invested in its nanotechnology division that is used for its hard coatings, dental restoratives, and brightness enhancing optical films. MMM stock currently trades at $198.40 as of 12:31 p.m. ET.
On April 27, 2021, the company reported strong first-quarter financials. To begin with, 3M reported sales of $8.9 billion for the quarter, up by 9.6% year-over-year. It also returned $1.1 billion to shareholders via dividends and gross share repurchases. Despite the uncertainty from the pandemic remaining a threat, the company continues to focus on driving growth, building on favorable market trends and improving operational performance, and delivering for customers and shareholders. In May, the company also declared a dividend of $1.48 per share for its second quarter of 2021. With that in mind, will you consider MMM stock a buy?
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Frontier Communications Parent Inc.
Frontier is a leader in the communications industry, with over 85 years of expertise and innovation. The company offers a variety of services to residential and business customers over its fiber-optic and copper networks in 25 states. For instance, its Frontier Business offers communications to small, medium, and enterprise businesses. FYBR stock currently trades at $29.55 as of 12:32 p.m. ET. Goldman Sachs initiated coverage of the company with a buy rating, saying that it has an opportunity to create material value as it deploys and drives penetration of its fiber network.
The company also reported its latest quarter financials in April, reporting a net income of $60 million on revenue of $1.63 billion. Impressively, Frontier says it expects to extend its fiber network to 495,000 locations in 2021, with approximately 100,000 locations completed in the first quarter itself. It also ended the quarter with a liquidity of $1.3 billion at emergence, creating flexibility to reinvest in its fiber network expansion.
Nick Jeffery, President and Chief Executive Officer of Frontier, said, “Frontier is now positioned with operational momentum and industry-leading leverage ratios to capitalize on the major growth forecast in the US fiber market. At this pivotal moment in the company’s evolution, we look forward to rapidly expanding our fiber footprint, delivering enhanced customer service offerings and value, and accelerating our efforts to build Gigabit America.” For these reasons, is FYBR stock worth buying right now?
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United Parcel Services Inc.
Another defensive name to consider now would be United Parcel Services (UPS) Inc. In brief, the Georgia-based company primarily focuses on shipping & receiving and supply chain management. Notably, it is one of the world’s largest shipping couriers in play now. Should the current economic growth be hampered by another wave of coronavirus cases, UPS stock could be worth watching. If anything, the reliance on UPS’s services could rise as consumers once again turn to e-commerce services regularly. Now, UPS stock currently trades at $212.45 a share as of 12:32 p.m. ET. Would it be worth buying at its current price point?
For one thing, UPS seems to be kicking into high gear. In its latest quarter fiscal posted back in April, the company reported solid figures. To begin with, UPS raked in a total revenue of $22.91 billion, marking an increase of 27% year-over-year. Over the same period, the company saw massive surges of 396% in net income and 392% in earnings per share. CEO Carol Tomé believes that the continued execution of the company’s core “better, not bigger” framework was a growth factor. With UPS delivering the world’s parcels and even COVID-19 vaccines, UPS stock could be a top defensive stock now. Would you agree?
