Elite Defensive Stocks to Navigate Market Turmoil
Amidst a sell-off mode in stock markets and a lack of stabilization on the horizon, CNBC Pro has identified a list of elite stocks that offer steady performance, income generation, and resilience during downturns. These carefully selected 10 stocks have met specific criteria to provide a defensive strategy for investors.
Central Bank Signals and Market Conditions
Despite the decision to skip a rate hike at the September Federal Open Market Committee meeting, the central bank's indication of fewer cuts next year has led Wall Street to anticipate higher-for-longer interest rates. With major indexes experiencing declines throughout September, including the S&P 500 and Nasdaq Composite pulling back 4.2% and 5.9% respectively, the market backdrop remains challenging.
Defensive Stocks Criteria
To compile the list of defensive stocks, CNBC Pro utilized their new stock screening tool, ensuring that all stocks met specific criteria. These criteria include a beta rating under 1, indicating lower volatility, positive performance since the beginning of the year, an average analyst consensus rating of buy, and an average analyst price target implying at least 10% upside from current trading levels.
One example of a defensive stock is grocery store operator Kroger, which boasts the lowest beta rating on the list at 0.47. Kroger's shares have shown a 2.4% increase since the beginning of the year. Despite falling short of revenue expectations, Kroger's strong fiscal second-quarter earnings performance has instilled confidence in the company's full-year outlook.
Fast food giant McDonald's, with a beta rating of 0.65, has seen a 3% increase in its stock since the start of the year. Analysts project a 21% upside for McDonald's stock from its current trading levels. Notably, McDonald's recently implemented its first change in royalty fees for new franchisees in over 30 years, increasing the fees from 4% to 5%.
Another stock on the defensive list is Hasbro, which has maintained the highest beta rating of 0.72. Hasbro's stock has climbed nearly 7% since the beginning of the year. The company's strategic focus on its toy and gaming segment, including the recent announcement of selling its production house eOne to Lionsgate, demonstrates its commitment to streamlining operations and reducing debt.
Other defensive stocks that made the list include agricultural products company Bunge, Oreo-owner Mondelez, and medical device manufacturer Medtronic.
In conclusion, these elite defensive stocks offer investors a potential strategy to navigate market turmoil. By meeting specific criteria and demonstrating resilience in challenging market conditions, these stocks provide stability and potential upside in an uncertain market landscape.
Defensive Stocks: A Potential Lifeline for New Businesses Amid Market Turmoil
In the face of a turbulent stock market, CNBC Pro's list of elite defensive stocks could offer a lifeline for new businesses seeking steady performance and resilience. This selection of stocks, which demonstrate robust performance amidst downturns, could provide a strategic blueprint for startups navigating these challenging times.
Market Conditions and Central Bank Signals
The market's current instability, coupled with Central Bank's indications of fewer cuts next year, has led to expectations of prolonged high interest rates. This environment poses a significant challenge for new businesses, making the exploration of defensive investment strategies crucial.
Defensive Stocks: A Potential Beacon for Startups
The criteria used by CNBC Pro to identify these defensive stocks could serve as a guide for new businesses. These include a beta rating under 1, indicating lower volatility, positive performance since the beginning of the year, an average analyst consensus rating of buy, and an average analyst price target implying at least 10% upside from current trading levels.
Companies like Kroger, McDonald's, and Hasbro, which have shown resilience and growth amidst market turmoil, could serve as models for new businesses. These companies' strategies, ranging from maintaining low beta ratings to implementing strategic changes, demonstrate a commitment to stability and growth that new businesses could emulate.
In essence, these elite defensive stocks could offer a roadmap for new businesses navigating market turmoil. By understanding and adopting the strategies of these resilient companies, startups can potentially weather the current market instability and position themselves for future success.
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