Are These The Top Defensive Stocks To Buy Now?
As we continue to move through the second half of 2022, stock market investors are turning to defense stocks as a good way to shelter your portfolio from the storm. In detail, the most recent GDP data that was released last week has given the U.S. economy the “recession” label. As well as, the fed confirmed another 75 basis point interest rate hike at the most recent FOMC meeting this month. With that, defense stocks have long been a favorite of investors seeking to protect their portfolios from volatile swings in the stock market now. Additionally, they are usually less sensitive to economic cycles than other sectors, making them a safe haven during times of market turmoil.
Also, defense stocks also tend to outperform the market during periods of rising interest rates, as investors seek out safe investments that will hold their value. defense stocks offer excellent value for money, and with the current geopolitical environment, they are likely to continue to outperform the market in the years to come. Keeping this in mind, let’s take a look at four top defensive stocks in the stock market now.
Defensive Stocks To Watch Right Now
- Lockheed Martin (NYSE: LMT)
- Boeing (NYSE: BA)
- Costco Wholesale Corporation (NASDAQ: COST)
- FedEx Corporation (NYSE: FDX)
Lockheed Martin
Following that, we will be taking a look at Lockheed Martin (LMT). Lockheed Martin Corp is a security and aerospace company. The Company is engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services. Shares of LMT stock are up over 4% over the last five trading days. LMT stock is trading at $418.70 per share on Monday morning.
Next, this month the company reported its second quarter 2022 earnings. In detail, LMT reported earnings per share of $6.32 on revenue of $15.4 billion. Compared with, the wall street consensus estimates were projected at $6.29 per share on revenue of $16 billion. Meaning, that Lockheed Martin missed on revenue but beat on earnings per share. Additionally, the company reported it now estimates 2022 earnings of nearly $26.71 a share, not including $5.16 per share in charges, on revenue of an estimated $62.25 billion. Previously, LMT reported its previous guidance at an estimated $26.70 per share on revenue of $66 billion.
“Lockheed Martin continued to deliver strong and consistent cash generation, returning over $1 billion in cash to shareholders in the second quarter through our industry-leading dividend and our ongoing share repurchase program,” said Lockheed Martin Chairman, President, and CEO James Taiclet. “Although revenue in the period was affected by supply chain impacts and the timing of customer contract negotiations, our cost management initiatives resulted in margin expansion.“
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Boeing
Following that, we have Boeing. In brief, they are a multinational corporation that designs, manufactures, and sells aerospace equipment. This ranges from airplanes, rotorcrafts, and rockets to satellites and telecommunication wares to name a few. Also, the company boasts more than 10,000 Boeing-built commercial airlines that are in service across the globe. This amounts to nearly 50% of the global fleet. Shares of BA stock rallied over 6% on Monday morning. BA stock is currently trading at $170 per share on Monday.
The rally comes after the Federal Aviation Administration approved for Boeing to continue its 787 Dreamliner deliveres. For context, deliveries for these aircrafts have been on pause for the last year. Furthermore, just last week Boeing reported a miss on its second quarter 2022 fiscal earnings. In the report, the company reported a loss of $0.37 per share on a revenue of $16.7 billion. The consensus estimate was a loss of $0.08 per share on revenue of $17.5 billion.
“We made important progress across key programs in the second quarter and are building momentum in our turnaround,” stated Dave Calhoun, Boeing President, and CEO. “As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022. While we are making meaningful progress, we have more work ahead. We will stay focused on safety, quality and transparency, as we drive stability, improve performance, and continue to invest in our future.” With that being said, should you be watching BA stock today?
Costco Wholesale Corporation
After that, let’s have a look at Costco. This company is arguably one of the largest defense stocks names to watch right now. For the uninitiated, Costco is a membership-only big-box retail store where consumers go shopping for items in bulk. The company sells a wide selection of products ranging from dry food and sundries to consumer durables to fresh food. In the past year, COST stock has increased more than 27%. On Monday, it is currently trading at $549.44 a share.
This month, the company announced its quarterly cash dividend. In detail, Costcos’ board of directors declared a quarterly cash dividend on COST stock of 90 cents per share. The quarterly dividend is payable August 12, 2022, to shareholders of record at the close of business on July 29, 2022.
This announcement comes following the company releasing its June sales results a week prior. In the report, they posted net sales of $22.78 billion for the retail month of June, the five weeks ended July 3, 2022. This reflects a 20.4% increase from $18.92 billion in 2021. With that, should investors be adding COST stock to their list of defense stocks to watch?
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FedEx Corporation
Last up, we have FedEx. The company is a multinational conglomerate that focuses on e-commerce, transportation, and services. In general, the company offers integrated business solutions through operating companies competing collectively, operating collaboratively, and innovating digitally under the FedEx brand. It also strives to achieve carbon-neutral operations by 2040. Currently, FedEx offers an annual dividend yield of 2.0%. Also, shares of FDX stock have jumped over 5% in the last month. As of Monday, FDX stock is trading at $236.83 a share.
Last month, FedEx reported its fourth-quarter financials for fiscal 2022. First off, FedEx reported revenue of $24.4 billion, an increase from $22.6 billion in the same period last year. Next, it posted a quarterly net income of $1.8 billion, or $6.87 a share. For context, this represents an increase from $1.36 billion or $5.01 per share a year prior. According to CEO Raj Subramaniam, moving forward, the company will be focusing on lowering costs, and revenue quality. Considering all of this, does FDX stock deserve a spot on your watchlist today?
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