Do You Have These Defensive Stocks On Your Mid-March Watchlist?
As volatility continues to persist in the stock market, investors may be considering swapping out of their current positions into safer defensive stocks. These companies are typically those which will perform steadily regardless of the state of the economy. Just yesterday, retail sales for February came in below consensus estimates. Namely, sales grew by 0.3% instead of the expected 0.4%, a sharp slowdown compared to 4.9% in January. This decrease in spending could be due to the inflationary effects that consumers are starting to feel. As the Fed finally lifted interest rates for the first time since 2018, it could also tame consumer spending. With these developments, it would not surprise me to see some investors looking for the best defensive stocks to buy in the stock market today.
Take General Electric (NYSE: GE) for instance. At its investor day last week, the company reaffirmed its outlook for 2022. GE believes that its organic revenues will see growth of more than 20%. On top of that, the company believes that it is poised to benefit from its transition into being an aviation-focused company. Apart from this, we could look at CVS Health (NYSE: CVS) which is looking to dip its toes into the metaverse. In brief, the pharmaceutical giant filed with the U.S. Patent Trade Office for a trademark to sell virtual goods, non-fungible tokens (NFTs), and provide health care services in the virtual world. With these developments in mind, check out these top defensive stocks in the stock market now.
Defensive Stocks To Buy [Or Avoid] Right Now
- Walmart Inc. (NYSE: WMT)
- PepsiCo Inc. (NASDAQ: PEP)
- The Kroger Company (NYSE: KR)
- Eli Lilly and Company (NYSE: LLY)
Walmart
As the world’s largest retailer, Walmart brings plenty to the table with its massive portfolio. From discount department stores to hypermarkets and grocery stores, the company does it all. For a sense of scale, the company currently operates a network of 10,500 stores spanning 24 countries. This alongside its e-commerce services continues to make Walmart a major shopping destination for consumers. On Tuesday, the retailer announced it is expanding its Walmart Global Tech hubs to Atlanta and Toronto.
The expansion into these locations is a strategic move on Walmart’s part to grow its tech presence. The company also highlighted that it plans to make Toronto one of its key tech hubs. As such, the retailer will be filling in hundreds of tech jobs in the next 12 months.
Along with that, Walmart Canada plans to invest $1 billion in technology as well as refurbish local stores. Including the two new hubs, Walmart Global Tech will have 17 hubs in various locations including Silicon Valley, Northwest Arkansas, Dallas, and India among others. Walmart Global Tech commits itself to building cutting-edge tech to help provide better experiences for its customers and members. With this expansion in place, should you invest in WMT stock?
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PepsiCo
Next up, we have PepsiCo. Most of us would be familiar with the global food company’s offerings. This ranges from its famous beverage lines such as Pepsi-Cola and Gatorade to food brands like Frito-Lay and Quaker. As a matter of fact, the company possesses 23 brands that have over $1 billion in sales. PepsiCo also estimates that its products are consumed over a billion times a day across more than 200 countries worldwide. Because of this, I can see why PEP stock may be appealing to investors looking for defensive stocks.
Earlier this week, Roll-Em-Up Taquitos announced a partnership with PepsiCo. This partnership comes at a time when the taquito franchise is beginning to expand its presence in the U.S. In fact, it had a record development year selling 420 franchise units in 2021.
Under the multi-year agreement, all Roll-Em-Up Taquitos restaurants will be offering customers a selection of beverages from the PepsiCo brand. These include Pepsi, Diet Pepsi, Mountain Dew, Horchata Agua Frescas, and Dr Pepper. Given this partnership with the quickly expanding franchise, do you think PEP stock is worth the investment?
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Kroger
Kroger is a retailer that operates supermarkets and multi-department stores throughout the U.S. Across its portfolio of companies, it has nearly half a million associates that serve over 11 million customers daily through its seamless shopping experience under a variety of banner names. It is one of the largest supermarket chains in the U.S. by revenue and the second-largest general retailer in the country. Earlier in the month, Kroger reported its fourth quarter results.
Diving in, identical sales without fuel increased by 4% year-over-year. Besides that, digital sales grew by 105% on a two-year stack basis. As for its profits, the company brought in earnings per share of $0.75 for the quarter.
CEO Rodney McMullen also provided some insight for the year, “As we look to 2022, we expect the momentum in our business to continue and have confidence in our ability to navigate a rapidly changing operating environment. We are leveraging technology, innovation, and our competitive moats to build lasting competitive advantages. Our balanced model is allowing us to deliver for shareholders, invest in our associates, continue to provide fresh affordable food to our customers, and uplift our communities.” Given the positive sentiment, are you keen on KR stock?
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Eli Lilly and Company
Closing us off today is drug manufacturing company Eli Lilly (LLY). For a sense of scale, the company has offices in 18 countries while its products are sold in approximately 125 countries. The company’s portfolio includes treatments for various diseases including diabetes, cancer, endocrine-related illnesses, and COVID-19 to name a few.
Over the past year, LLY stock has increased in price by over 45%. Recently, LLY and Incyte Corporation (NASDAQ: INCY) announced that its arthritis drug baricitinib has a role to play in the survivability of COVID-19 patients.
In its RECOVERY trial, over 8,000 patients were administered baricitinib in addition to usual care. It appears that the drug could reduce the risk of death in hospitalized patients by 13%. Most importantly, it does not matter which coronavirus treatment was given prior. As it stands, the FDA has authorized the drug as a Covid-19 treatment on an emergency basis and is considering LLY’s application for full approval. All in all, these findings confirm and extend its earlier findings, providing greater certainty that baricitinib is indeed beneficial for COVID-19 patients. With that said, would you consider adding LLY stock to your watchlist?
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