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These defensive stocks could help investors fortify their portfolio in this risky market

Chaim Potok by Chaim Potok
October 9, 2023
in Investing
These defensive stocks could help investors fortify their portfolio in this risky market
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The unexpected Israel-Hamas conflict is the latest risk to what was already an unstable market environment — but there are ways investors can strengthen their portfolios. Oil prices rose Monday following the Hamas attack over the weekend . The action in oil prices occur at a time when investors are already grappling with worries over higher interest rates, inflation and slowing economic growth. CNBC Pro used FactSet data to screen for stocks that offer investors steadiness in a shaky market. The names had to meet the following criteria: They must be steadier than the market. This means their beta is less than one, indicating the price is less volatile than the market. They must offer income – that is, a dividend yield in excess of 2%. They must have low debt. This means their debt-to-equity ratio is below 75%. Finally, they must be positive this year. Take a look at the stocks that can help bolster investors’ portfolios: Beverage giant Molson Coors made the list of stocks ideal during unstable times. It has a debt-to-equity ratio of 50.77 and a beta value of 0.93. The company provides investors a dividend yield of 2.8%. Wall Street is conflicted on Molson Coors, with 12 of the 18 analysts covering the stock rating it a hold, according to LSEG, formerly known as Refinitiv. Nevertheless, the average price target suggests about 16% upside from here. Roth MKM analyst Bill Kirk rates Molson Coors a buy following the company’s recent strategy day . “They are planning for growth and operating leverage with enough confidence to institute a $2bn share repurchase plan (over five years),” Kirk wrote in an Oct. 4 note. The stock has gained 14% in 2023. TAP YTD line Molson Coors year-to-date performance Networking and cloud solutions giant Cisco Systems also made the list. Shares are up more than 12% year to date, with 11 out of 26 analysts rating it a buy or strong buy, according to LSEG. Cisco recently came up in a Goldman Sachs screen for names that have low vulnerability to rising borrowing costs , a top-of-mind issue in today’s “higher for longer” interest rate environment. The stock pays a 2.9% dividend yield. Agricultural products company Bunge made the cut. Back in August, Bunge posted mixed second-quarter results: adjusted earnings of $3.72 on revenue of $15.05 billion. Analysts polled by FactSet called for earnings of $2.69 per share and revenue of $16.35 billion. The company also hiked its full year guidance, forecasting earnings of at least $11.75 per share, while consensus estimates anticipated $11.67 per share. In September, Bunge also came up in a CNBC Pro screen for defensive stocks to help investors ride out a market selloff. The stock pays a dividend yield of about 2.5%, and shares are up 6% for the year. Other names in the screen include Paychex , Packaging Corp of America and CME Group . —CNBC’s Darla Mercado and Michael Bloom contributed to this report.



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