A Duo of Defensive Stocks for the Value Investor
If you want to make your portfolio more resilient so that it will be strong enough to withstand recessions, the defensive stocks in this article may be suitable. These businesses have continued to generate earnings and dividends during economic recessions as they offer goods and services on which people do not typically cut their spending, even in times of financial distress.
Furthermore, as of the time of writing, these stocks offer compelling price-earnings ratios compared to the S&P 500's 24.84, and Wall Street sell-side analysts have issued positive recommendations for them.
Casey's General Stores Inc.
The first stock investors could be interested in is Casey's General Stores Inc. (NASDAQ:CASY), an Ankeny, Iowa-based operator of 2,243 supermarkets across 16 states in the U.S. Midwest.
Over the past five years, the trailing 12-month diluted EPS from continuing operations ($7.94 as of the fiscal quarter ended on Oct. 31, 2021) increased by 8.50% on average every year. Over the past five years, the trailing 12-month dividend per share ($1.37 on Nov. 15, 2021 when the last quarterly distribution was made) has grown 9% annually.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10 to the company.
The share price closed at $185.01 on Tuesday for a market capitalization of $6.87 billion, a price-earnings ratio of 23.30 and a trailing 12-month dividend yield of 0.74%.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $227.82 per share.
Archer-Daniels-Midland Co.
The second stock investors could be interested in is Archer-Daniels-Midland Co. (NYSE:ADM), a Chicago-based multinational food processing and commodities trading company.
Over the past five years, the trailing 12-month diluted EPS from continuing operations ($4.63 as of the September 2021 quarter) has increased by 2.20% on average every year. Over the past five years, the trailing 12-month dividend per share ($1.48 on Dec. 8, 2021 when the last quarterly distribution was made) has grown 5.20% annually.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 6 out of 10 to the company.
The stock traded at $68.37 at close on Tuesday for a market capitalization of $38.25 billion, a price-earnings ratio of 14.77 and a trailing 12-month dividend yield of 2.15%.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $73 per share.
This article first appeared on GuruFocus.
