Defensive Stocks Bucking The Stock Market Weakness (PEP, CAG, CPB, MCD, MO, VGR, PG, CL, KMB, JNJ, AWK)

When you see a ten-day sell-off and a capstone panic day with what is a 300-point sell-off in the Dow Jones Industrial Average, the first reaction is that no one wants anything and that every stock with profits is a source of funds.  While that is true for many sectors, there are many defensive stocks that are holding up far better than the broad market today.  Some of these have even been positive.  If you have to apply it to your body, or if you have to drink it or eat it or smoke it then it is good in times of uncertainty.

Kraft may be winning today in defensive stocks, but that is because of its break-up.  It is some of the other stocks in our go-to defensive list that are holding up very well today.  These all have dividends and will have business whether Europe and other worries torpedo the stock market or not.  And on a day like today, we are looking for companies that are only down less than half the broader market. These winners or “less of losers” are in the following: Pepsico, Inc. (NYSE: PEP); ConAgra Foods, Inc. (NYSE: CAG); Campbell Soup Company (NYSE: CPB); McDonald’s Corporation (NYSE: MCD); Altria Group, Inc. (NYSE: MO); Vector Group Ltd. (NYSE: VGR); Procter & Gamble Company (NYSE: PG); Colgate-Palmolive Company (NYSE: CL); Kimberly-Clark Corporation (NYSE: KMB); Johnson & Johnson (NYSE: JNJ); and American Water Works Company, Inc. (NYSE: AWK).

If you can eat it and drink it…

Pepsico, Inc. (NYSE: PEP) $64.49, actually up $0.01 probably because it has a snack-food business like Kraft that could be spun off if it wanted to.  Do not hold your breath for Pepsi to bust up its empire.  The 3.3% yield helps too. Percent from 52-week high: 10.7%.

ConAgra Foods, Inc. (NYSE: CAG) is down only 1.4% at $24.73 and it has a 3.7% yield.  It could have some break-up too but Kraft was different than ConAgra.  Percent from 52-week high: 7.5%.

Campbell Soup Company (NYSE: CPB) is down 1.2% at $32.54 with its 3.6% dividend yield but the company already outlined some of its challenges ahead.  Percent from 52-week high: 14.0%.

McDonald’s Corporation (NYSE: MCD) is a winner even when it loses as “the you gotta eat somewhere” move steers folks to Micky D’s.  After having recently hit new all-time highs, it is down only 0.25% at $85.32.  Its dividend is just under 3% now. Percent from 52-week high: -5.1%.

Can I bum a smoke?…

Altria Group, Inc. (NYSE: MO) is down 0.6% at $26.18.  Do you need an explanation beyond the 5.9% dividend yield? Percent from 52-week high: -7.7%.

Vector Group Ltd. (NYSE: VGR) is down only 0.2% at $17.49 and it has closer to a 9% dividend yield.  If Obama and Boehner both smoke, they probably had many more smokes in the last month than normal. Percent from 52-week high: -16.3%… that is down enough you might wonder how ‘defensive’ it is.

Shaving, deodorant, diapers and more….

Procter & Gamble Company (NYSE: PG) is down only 0.4% at $60.49 with its 3.4% dividend. Percent from 52-week high: -11.0%.

Colgate-Palmolive Company (NYSE: CL) is down 0.5% at $83.91 with a 2.7% yield.  Percent from 52-week high: 6.5%.

Kimberly-Clark Corporation (NYSE: KMB) is down a bit more at -1% at $63.89, but it offers the best yield in consumer products at 4.3%. Percent from 52-week high: 7.1%.

Johnson & Johnson (NYSE: JNJ) is the real medical or drug winner on a day where drug stocks are not holding up, but it also has consumer products.  J&J is down ‘only’ 0.9% at $62.83 with a 3.6% yield.  Percent from 52-week high: 8.0%.

H2O, You Know You Need Water…

American Water Works Company, Inc. (NYSE: AWK) had earnings that went well to the higher part of guidance but profit taking has come here too.  Shares are down 1.2% at $27.95 and that takes it back within striking distance of the 10% correction from the high.  It almost never gives a 10% pullback opportunity for buyers. The 3.3% dividend can’t be too bad either. Percent from 52-week high: 9.0%.

*****

The DJIA is down 2.7% or 324 points to 11,571.53 today.  When you see stocks down half that amount or almost up on the day, it doesn’t take a rocket scientist to figure out that money is not fleeing these names.

JON C. OGG