Check Out These Defensive Stocks For Your July 2022 Watchlist
As we enter the second half of the year, it is not lost on stock market investors that the S&P 500 turned in its worst first half since 1970. Because of this, investing in defensive stocks might be a good way to shelter your portfolio from the storm. Defensive stocks are often characterized by having a strong position in broad markets coupled with durable competitive advantages. Generally, they include companies whose products and services are essential to our daily lives. Therefore, these stocks tend to be more resilient during a turbulent market.
A defensive stock that investors might be watching right now is Constellation Brands (NYSE: STZ). On Thursday, the beverage company posted its earnings for its fiscal 2023 first quarter which beat forecasts. The Corona beer maker saw a 17% increase in sales year-over-year. Elsewhere, we have Mondelez International (NASDAQ: MDLZ). The snack food company is working on reshaping its portfolio to drive long-term growth. Specifically, Mondelez signed an agreement to acquire a well-known maker of energy bars, Clif Bar & Company, for $2.9 billion. With this news in mind, check out these five top defensive stocks in the stock market today.
Defensive Stocks To Watch Right Now
- Costco Wholesale Corporation (NASDAQ: COST)
- General Electric Company (NYSE: GE)
- FedEx Corporation (NYSE: FDX)
- The Kellogg Company (NYSE: K)
- The Kroger Company (NYSE: KR)
Kicking off our list today is Costco, arguably one of the biggest names 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 more than 20% in price.
On Thursday, the company bought the 45% stake it did not own in its Taiwan joint venture, Costco-Taiwan, for $1.05 billion. To this end, it now indirectly owns all of Costco Taiwan. Consequently, the company estimates this purchase to add roughly 1% to 1.5% to its earnings per share. As it stands, Costco operates 833 warehouses globally, including 14 in Taiwan. Besides that, the company also runs its e-commerce site in Taiwan as well. Given this purchase, should you buy COST stock?
General Electric (GE) is a multinational conglomerate that boasts leading positions in a wide array of industries. Namely, these include renewable energy, aviation, healthcare, and power businesses. In fact, GE Renewable Energy is a $16 billion business that combines one of the broadest portfolios in the renewable energy industry. To be specific, this segment of GE provides end-to-end solutions to clients who want reliable and affordable green power. Impressively, the company has installed more than 400 gigawatts of clean renewable energy.
Earlier this week, GE announced that its CEO Larry Culp will be taking over the leadership role of its aviation unit. As such, current CEO John Slattery will be moving to the role of chief commercial officer in the business division. Evidently, this move comes as part of its plans to split into three companies. Culp said, “There is tremendous opportunity in aviation over the coming years, and the Board and I decided it is the right time for me to take on this expanded role and work even more closely with the team to support our customers, meet the unprecedented demand ramp, and prepare for GE Aviation’s future as an independent public company.” And on that note, will you be watching GE stock?
FedEx is a multinational conglomerate that focuses on e-commerce, transportation, and services. In brief, 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. As it stands, FedEx now offers an annual dividend yield of 2.0%.
Last week, FedEx reported its fourth-quarter financials for fiscal 2022. For starters, FedEx brought in a revenue of $24.4 billion, up from $22.6 billion in the same period last year. Moving on, it posted a quarterly net income of $1.8 billion, or $6.87 a share. To point out, this represents an increase from $1.36 billion or $5.01 per share a year ago. According to CEO Raj Subramaniam, moving forward, the company will be focusing on revenue quality and lowering costs. Given this, does FDX stock have a spot on your watchlist?
Kellogg’s is a manufacturer and marketer of ready-to-eat cereals and convenience foods. For the most part, its principal products are snacks ranging from crackers, cereals, frozen waffles, to noodles. You may know its products through brands such as Kellogg’s Corn Flakes, Cheez-It, Pringles, and many more. Looking at its market reach, Kellogg’s distributes its products to more than 180 countries around the world.
Last week, the company announced that it is planning to split into three separate public companies. Notably, Kellogg’s plan to section off its iconic brands into snacking, cereal and plant-based businesses, each better positioned to unlock their full standalone potential. Although the names for the new companies and management teams have yet to be finalized, the spinoffs are expected to be completed by the end of 2023. According to the company, separating the businesses now will allow each of them to better pursue its individual strategic priorities. Therefore, should you buy K stock?
Last, but not least, is Kroger. In short, it is a retailer that operates supermarkets and multi-department stores throughout the U.S. Across its portfolio, it has nearly half a million associates that serve over 11 million customers daily. It is one of the largest supermarket chains in the U.S. by revenue. Over the past year, KR stock has risen by about 27%. Last month, Kroger posted its first-quarter 2022 results.
Getting into it, total company sales came in at $44.6 billion in the first quarter, increasing by 3.8% from the same period last year. This also exceeds analyst predictions of $44.16 billion. As for its profits, Kroger posted a net income of $664 million, or $0.90 per share, rising sharply from the $140 million, or $0.18 per share it reported last year. In the same earnings letter, Kroger also raised its full-year guidance. Accordingly, it now expects identical sales to grow by 2.5% to 3.5% and adjusted earnings per share to be in the range of $3.85 to $3.95. All in all, should you invest in KR stock?