Core Insights - Defensive stocks have been underperforming the market for an extended period, indicating a potential opportunity for investors [1] - Recent signs suggest that defensive stocks may be on the verge of a comeback, making them reasonably valued [1] Summary by Category Market Performance - Defensive stocks have lagged behind the broader market for too long, highlighting a trend that may be reversing [1] Valuation - Current valuations of defensive stocks appear reasonable, suggesting that they may offer attractive investment opportunities [1] Recovery Signs - Emerging indicators point towards a potential recovery in defensive stocks, which could lead to improved performance in the near future [1]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The market is experiencing significant volatility, with 500-point swings in the Dow Jones Industrial Average becoming common [2] - The investment strategy emphasizes defensive stocks with a medium- to long-term horizon [2]

Core Insights - The article emphasizes the importance of focusing on income-producing asset classes for sustainable portfolio income, diversification, and inflation hedging [1] Group 1: Investment Philosophy - The investment philosophy highlighted includes the idea that a positive outlook on a company often comes with a higher price, suggesting caution in overly optimistic valuations [2] Group 2: Analyst Position - The analyst has a beneficial long position in General Mills (GIS), indicating confidence in the stock's performance [3] Group 3: General Disclaimers - The article serves informational purposes and does not constitute financial advice, encouraging readers to conduct their own due diligence [4][5]

Market Trends - The current trend for stocks remains bullish, particularly for technology and AI stocks, despite signs of economic slowdown [1] - The government shutdown may have a larger ripple effect on the economy, contrasting with the government's previous rescue actions in 2021 [2] - Investors are advised to consider adding defensive stocks due to ongoing economic uncertainty [2] Costco Wholesale - Costco has proven its value to consumers and investors, with a steady increase in membership fees and strong sales growth [4][5] - The stock has provided a total return of over 175% due to year-over-year comparable sales growth, buybacks, and dividends [5] - Despite its high share price of over $930, Costco's valuation remains reasonable compared to its historical performance [6] Chevron - Chevron has faced challenges as energy stocks have not performed well for growth investors, with crude oil prices not rising as expected [7] - The company is well-positioned in the LNG market, particularly in Asia, which is expected to drive revenue growth as markets shift away from coal [8] - Analysts forecast earnings growth of over 16.5%, suggesting Chevron stock may be undervalued at around 13x earnings [9] Clorox - Clorox is viewed as a contrarian pick among defensive stocks, with its stock trading near six-year lows due to post-pandemic demand struggles [11] - The company is modernizing operations and improving operating margins, which may present a buying opportunity despite bearish sentiments [12] - Clorox's stock has established a solid technical support base around $118, but it needs to demonstrate revenue and earnings growth to regain investor confidence [13]

Group 1: Market Overview - Resurfaced tensions between the U.S. and China have led to a significant market reaction, with the S&P 500 and Nasdaq falling over 2% due to President Trump's announcement of a 100% tariff on Chinese goods starting November 1 [1] - The tariff decision was influenced by China's aggressive stance in ongoing trade talks, including new export controls on the U.S. [1] Group 2: Defensive Investment Opportunities - In light of market volatility, investors are seeking defensive stocks to safeguard their portfolios [2] - The medical sector has been highlighted as a defensive position, with companies like Gilead Sciences (GILD) and Johnson & Johnson (JNJ) performing well [3] Group 3: Company Performance - Gilead Sciences and Johnson & Johnson are near their 52-week highs, with both stocks up more than 25% year to date, driven by strong drug pipelines [4] - Both companies offer attractive dividends around 2.7%, surpassing the Zacks Medical sector average of 1.47% and the S&P 500 average of 1.1% [5] Group 4: Kroger's Position in Retail - Kroger (KR) is recognized as a defensive investment, with its stock up 13% in 2025 despite earlier tariff concerns [9] - Kroger's stock trades at a reasonable 14X forward earnings multiple and under 2X sales, indicating strong value [9] - The company has shown steady growth, earning an overall "A" VGM Zacks Style Scores grade for Value, Growth, and Momentum, along with an annual dividend yield of over 2% [10] Group 5: Dividend Metrics - Kroger's annual dividend is $1.40 with a yield of 2.07%, and it has a 15.24% annualized dividend growth rate over the last five years [11] - The company's payout ratio stands at 28%, suggesting potential for future dividend increases [10][11] Group 6: Investment Outlook - Gilead Sciences, Johnson & Johnson, and Kroger are positioned as viable defensive investments, currently holding a Zacks Rank 3 (Hold) [12]

Economic Overview - Economic risks are increasing, prompting investors to consider capital preservation strategies [1][2] - The Federal Reserve cut its benchmark federal funds rate by 0.25% in mid-September, with expectations for further cuts by the end of 2025 [1] - A government shutdown began on October 1, leading to uncertainty regarding federal funding and potential layoffs [2] Consumer Behavior - Consumer spending is anticipated to remain strong through 2025 but is expected to slow down significantly in 2026 [4] - Aggregate wages were growing faster than spending at the start of Q3, but slowed employment growth may restrain wage growth and spending [5] Defensive Investment Strategies - Investors are shifting towards defensive stocks in sectors like utilities, healthcare, and defense to protect profits [3][5] - Resilient sectors include those with inelastic demand, pricing power, and low refinancing risk [6] Stock Recommendations - Top defensive stock picks include Exxon Mobil (strong cash flow and dividends), Chevron, TotalEnergies, Verizon, and Costco [7] - Doug Butler recommends WEC Energy, Colgate-Palmolive, and Chubb as defensive plays [9] Bonds and Real Estate - Treasuries are recommended as a safe investment during economic uncertainty, with expectations of rate cuts [9] - Real estate funds are seen as opportunities due to the banking sector's withdrawal from traditional lending, with a focus on funds benefiting from anticipated rate cuts [9][10]

Core Viewpoint - Chubb is considered a potentially undervalued stock despite its solid performance history, with a forward P/E ratio under 13 and consistent revenue growth expected [7]. Group 1: Company Performance - Chubb has shown high revenue growth for an established business, maintaining profitability and consistently paying and raising dividends [1]. - A $1,000 investment in Chubb stock made in 2022 would now be worth $1,428, which is lower than the $1,516 return from the S&P 500 index [3]. - Historically, Chubb has outperformed the stock market benchmark due to its reliable quarterly payouts and constant profitability [5]. Group 2: Market Trends - The stock has faced challenges this year as investors shifted from defensive stocks like Chubb to riskier assets, driven by a thriving stock market and easing trade tensions [2][6]. - The demand for higher returns from riskier investments has negatively impacted Chubb's stock performance, leading to its current status as a bargain [6]. Group 3: Future Outlook - Analysts project Chubb's revenue to rise by over 4% in full-year 2025, indicating positive growth prospects [7].

Core Viewpoint - Chubb's latest earnings report, while beating analyst estimates, did not impress investors, leading to a more than 4% drop in stock price on the day of the announcement [1][5] Financial Performance - Chubb's net premiums written increased by 6% year-over-year, reaching just under $14.2 billion [2] - The company's net income was slightly below $3 billion, up from $2.2 billion in the same quarter last year [4] - Core operating income rose to $6.14 per share, compared to $5.38 per share in the previous year [4] - Analysts had estimated revenue of $14.16 billion and core operating income of $5.96 per share [4] Management Commentary - Management attributed the improvements in performance to strength across various markets, highlighting the diversified nature of the company [5] Market Reaction - The negative market reaction is attributed more to external factors rather than dissatisfaction with Chubb's performance, as investors are currently moving away from defensive stocks [5]

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The investment strategy emphasizes stocks that generate robust cash flow consistently rather than those that are frequently in the news [2] - The approach is defensive in nature, targeting medium- to long-term investment horizons [2] Group 2 - The article does not provide specific financial advice or recommendations, emphasizing the importance of due diligence by readers [4][5] - There is a disclosure regarding a beneficial long position in AMCR shares, indicating a vested interest in the stock [3]

Group 1 - The market is currently in a risk-on mode, with the S&P 500 and Nasdaq Composite Index nearing all-time highs [2] - The focus is on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] Group 2 - The article emphasizes the importance of defensive stocks for medium- to long-term investment horizons [2]