The Unshakeable Seven: Bet On These Consumer Defensive Stocks to Navigate Market Mayhem

Economic Context and Consumer Behavior - The April jobs report indicated fewer employment opportunities added than expected, suggesting a disinflationary trend and fewer high-paying jobs in the labor market [1] - Consumers are showing caution in discretionary purchases, including health and personal care expenditures, amid a collective credit card debt load exceeding $1 trillion [1] - Cyclical ideas may suffer due to cautious consumer behavior, making consumer defensive stocks a safer investment option [1][2] Walmart (WMT) - Walmart is a practical choice for consumer defensive stocks due to its accessibility, convenient locations, and ability to meet demand outside of e-commerce [3] - The company consistently matches or exceeds quarterly earnings targets, with a 6.88% average positive earnings surprise in fiscal 2023 [3] - For the current fiscal year, analysts expect EPS of $2.36 on revenue of $637.49 billion, a solid improvement from last year's $2.22 EPS and $648.12 billion in sales [4] - Walmart offers a forward annual dividend yield of 1.37%, making it a decent defensive stock option [4] TJX Companies (TJX) - TJX Companies, focused on apparel retail, benefits from the competitive job market, as consumers seek affordable options for professional attire [5][6] - The company posted a 7.58% average positive earnings surprise in fiscal 2023 and is expected to continue steady progress [6] - Analysts project EPS of $4.10 on revenue of $56.28 billion for the current fiscal year, up from $3.86 EPS and $54.22 billion in sales last year [7] - TJX offers a forward dividend yield of 1.52% [7] Colgate-Palmolive (CL) - Colgate-Palmolive is a defensive stock due to its essential products in oral hygiene and home maintenance, which remain in demand regardless of economic conditions [8] - The company has a 4.7% average positive earnings surprise over the past four quarters [8] - For fiscal 2024, analysts expect EPS of $3.53 on revenue of $20.21 billion, up from $3.23 EPS and $19.46 billion in sales last year [9] - Colgate-Palmolive offers a forward dividend yield of 2.1% [9] Coca-Cola (KO) - Coca-Cola is a top consumer defensive stock due to its global brand recognition and affordability as a caffeine alternative [10][11] - The company has a 4.38% average positive earnings surprise over the past four quarters [11] - Analysts project EPS of $2.82 on revenue of $45.68 billion for the current fiscal year, with potential growth to $3.02 EPS and $47.89 billion in revenue next year [11] - Coca-Cola offers a forward dividend yield of 3.07% [12] McDonald's (MCD) - McDonald's is a defensive stock due to consistent demand for low-cost dining and its innovative drive-thru concept, CosMc's [13] - The company has a 5.93% average positive earnings surprise over the past four quarters, despite a slight miss in Q1 2024 [13] - Analysts expect EPS of $12.20 on revenue of $26.62 billion for fiscal 2024, up from $11.15 EPS and $23.82 billion in sales last year [14] - McDonald's offers a forward dividend yield of 2.43% [14] Five Below (FIVE) - Five Below attracts a wide customer base with its pricing flexibility, offering products up to $25 alongside its $1-$5 mainline portfolio [15][16] - The company has been volatile but delivered a 3.1% average positive earnings surprise in fiscal 2023, despite a Q4 miss [16] - Analysts project EPS of $6.04 on revenue of $4.04 billion for the current fiscal year [17] Philip Morris (PM) - Philip Morris is a controversial but potentially undervalued defensive stock, with consistent earnings performance and growth in alternative smoking products [18][19] - Analysts expect EPS of $6.29 on revenue of $36.94 billion for fiscal 2024, up from $6.01 EPS and $35.25 billion in sales last year [19] - The company offers a forward dividend yield of 5.22%, making it an attractive defensive stock [19]