Buy 5 Low-Beta Defensive Stocks as Consumer Sentiment Hits 7-Month Low

Economic Overview - Concerns over inflation have led to a decline in consumer sentiment, with the Consumer Sentiment Index falling to 67.8 in February from 71.1 in January, marking a seven-month low [5][6] - The inflation expectation index for the next year rose to 4.3% in February from 3.3% in January, the highest since November 2023, while the five-year outlook increased to 3.3% from 3.2%, the highest since June 2008 [6] Federal Reserve Actions - The Federal Reserve maintained interest rates in January due to an unexpected rise in inflation, keeping the benchmark policy rate in the range of 4.25-4.5% [2][8] - The Fed's previous rate reductions and a series of 525 basis point increases since March 2022 have made it challenging to achieve the 2% inflation target [7][8] Investment Recommendations - In light of economic uncertainty, it is advisable to invest in utility and consumer staple stocks, which are considered defensive [3][4] - Recommended stocks include: - Atmos Energy Corporation (ATO): Expected earnings growth of 5.1%, Zacks Rank 2, beta of 0.72, dividend yield of 2.44% [12] - American Water Works Company (AWK): Expected earnings growth of 8%, Zacks Rank 2, beta of 0.72, dividend yield of 2.50% [14] - NextEra Energy, Inc. (NEE): Expected earnings growth of 7.3%, Zacks Rank 2, beta of 0.58, dividend yield of 3.02% [16] - Tyson Foods (TSN): Expected earnings growth of 22.6%, Zacks Rank 2, beta of 0.80, dividend yield of 3.45% [18] - Lancaster Colony Corporation (LANC): Expected earnings growth of 6.1%, Zacks Rank 2, beta of 0.35, dividend yield of 2.01% [20] Market Sentiment - The uncertainty surrounding inflation and potential trade wars has contributed to market volatility, which is expected to persist until the next rate cut [10]