Are These The Best Defensive Stocks To Buy Right Now?
As we enter a new trading week, defensive stocks could be turning heads in the stock market. With inflation in the U.S. climbing to 8.5% in March, a growing number of forecasters now believe that a recession could be on its way. As such, investing in defensive companies that can survive a market downturn could be a wise idea. For the uninitiated, defensive companies can be characterized by being stable and resilient regardless of how the broader economy is performing.
Hence, defensive stocks typically comprise companies from industries such as consumer staples, health care, and utilities. This would include the likes of health care company Johnson & Johnson (NYSE: JNJ) and consumer staples manufacturer Procter & Gamble (NYSE: PG). Both of which are set to announce their quarterly financials in the week ahead. With that being said, watch out for these five defensive stocks in the stock market today.
Defensive Stocks To Buy [Or Sell] Right Now
- UnitedHealth Group Inc. (NYSE: UNH)
- Walmart Inc. (NYSE: WMT)
- Costco Wholesale Corporation (NASDAQ: COST)
- The Kraft Heinz Company (NASDAQ: KHC)
- Conagra Brands Inc. (NYSE: CAG)
UnitedHealth Group
Defensive stock investors could be looking at right now is UnitedHealth Group (UNH). It is a multinational health care and insurance company. The company is dedicated to helping people live healthier lives and making health care work for everyone. Moreover, it offers a full spectrum of health benefit programs for individuals, employers, and Medicare and Medicaid beneficiaries. UNH also contracts directly with more than 1.3 million physicians and care professionals. Over the past six months, UNH stock has risen by about 25%.
On Thursday, UNH reported its results for its first quarter of fiscal year 2022. Jumping in, revenues came in at $80.1 billion, an increase of almost $10 billion. This translates into year-over-year growth of 14.2%. The company saw strong double-digit growth in both its Optum and UnitedHealth segment. Moving on, earnings came in at $7 billion compared to $6.7 billion last year. Accordingly, adjusted earnings were $5.49 per share. This growth was led by Optum Health and its expansion of value-based care delivery initiatives. All in all, given the strong quarter, is UNH stock a buy?
Walmart
Next up, we have the world’s largest big-box retailer, Walmart. 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. Coupled with its e-commerce services, Walmart continues to remain a major shopping destination for consumers. In the past six months, WMT stock rose by about 10%.
On April 12, Walmart announced the appointment of John Rainey as its new CFO. Prior to this, Rainey served the same role at PayPal (NASDAQ: PYPL). Rainey will take the reins from long-time Walmart CFO Brett Biggs, who announced his departure in November. This comes at a time where Walmart aims to expand its streams of revenue. Namely, the company is looking to expand its third-party marketplace and ramp up its advertising business. Walmart CEO Doug McMillon said that Rainey “has a proven track record of leading change at scale in customer service organizations innovating in their fields.” With that being said, are you keen on WMT stock?
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Costco
Costco is another notable name in the defensive space to consider now. It is the membership-only big-box retail store that many of us are likely familiar with. After all, it is the go-to store when consumers wish to buy items in bulk. Costco sells a variety of products ranging from dry food and sundries to consumer durables to fresh food. In the past year, COST stock has appreciated by almost 60% in price.
Last week, the retailer’s board of directors raised the quarterly dividend to $0.90 per share, a 13.9% increment. The increase reflects the company’s strong cash flow generation capability, driven by better execution of operating plans. Besides that, the company posted solid sales results in March. Notably, net sales came in at $21.61 billion, a year-over-year increase of 18.7% from $18.21 billion. Along with that, comparable sales for the five-week period rose 17% year-over-year. As for its e-commerce segment, sales rose by 8.9%. Given this, would you add COST stock to your portfolio?
Kraft Heinz
Kraft Heinz (KHC)is a company that commits itself to growing its iconic and emerging brands on a global scale. But not only that, as the company also continues to invest in its brands for long-term value creation. KHC’s brands include brands such as Heinz, Kraft, Lunchables, and Jell-O to name a few. In fact, it is one of the biggest food companies in the world and has operations in over 40 countries.
At the start of the month, KHC announced that it has completed its acquisition of Hemmer, a Brazilian food company focused on condiments and sauces. For those unfamiliar, Hemmer is a 107-year-old company that will expand the company’s international Taste Elevation platform with its focus on condiments and sauces. Additionally, the acquisition will also allow the company to increase its presence in emerging markets. Seeing that both companies have a product portfolio that complements each other, the acquisition will likely boost the growth of both companies. With this acquisition in place, is KHC stock on your watchlist?
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Conagra Brands
Finally, we have Conagra Brands. In brief, it is a company that engages in marketing and selling edible consumer packaged goods. For the most part, it makes and sells products under a wide variety of brands. The likes of which are mostly marketed towards supermarkets and restaurants among other food service establishments. This includes food products such as cooking oil, frozen dinners, and such. In fact, CAG stock has risen by about 12% over the past month.
Earlier in the month, Conagra reported results for the third quarter of fiscal year 2022. For starters, net sales were up by 5.1% year-over-year to $2.9 billion. Organic net sales also saw an increase of 6% this quarter. Evidently, this growth in organic sales was driven by an 8.6% improvement in price/mix. Next to that, the company brought in adjusted earnings per share of $0.58. On a two-year basis, this is an increase of 11.1%. Financials aside, Conagra also updated its fiscal 2022 fourth-quarter guidance. Accordingly, the company expects organic sales to grow by approximately 7%. With this performance in mind, should you invest in CAG stock?
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