Best Consumer Defensive Stocks

Even in difficult economic times, people will still spend their money on health-related items, households will need utilities and consumers will buy household goods. Here are some stocks you may want to add to your portfolio.

Walmart (NYSE: WMT)

123.78 0.16 (0.13%)
10.62M
339.30B
123.16 - 125.31
117.27 - 160.77

Walmart is a multinational retail corporation that’s grown into the largest retailer in the world over the last 50 years. Through innovation, the corporation has created a seamless shopping experience both in-store and online. It operates close to 11,500 stores in 27 countries and e-commerce websites in 10 countries.

The company first went public in 1970 and provides an annual cash dividend, paid quarterly to all shareholders. WMT employs close to 2.2 million associates worldwide and reported $524 billion in revenue for the fiscal year ended January 31, 2020. As of March 18, 2020, WMT had 217,840 holders of its common stock. WMT reported a price-to-earnings ratio of $24.94 and earnings per share of $5.19.

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Coca-Cola (NYSE: KO)

63.06 1.18 (1.91%)
18.15M
273.37B
62.11 - 63.06
52.28 - 67.2

Should the economic recession last longer than experts anticipate, Coca-Cola is well-positioned for potential volatility. That’s because as a premier soft drinks and beverages provider, Coca-Cola benefits from the “cheap thrill” thesis. Essentially, its products offer a cheap, sugary high – a brief respite from the doldrums.

In addition, KO stock affords stakeholders a reliable business. Over the trailing year, EPS is $1.80. Moreover, Coca-Cola offers a fairly sizable dividend yield at 3.3%.

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Nestle (OTC: NSRGY)

116.87 3.5 (3.09%)
29.70K
322.51B
115.3 - 117.05
106.67 - 141.95

With a 150-year-plus history, Nestle is the largest food and beverage manufacturer in the world by sales, generating more than CHF 90 billion in annual revenue. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle also owns just over 20% of French cosmetics firm L’Oreal. The company has a vast portfolio of global products, with more than 30 brands each achieving more than CHF 1 billion in sales annually and a geographic presence that spans almost 190 countries.

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Costco Wholesale (NASDAQ: COST)

484.37 9.37 (1.97%)
2.86M
214.56B
476.676 - 484.83
391.25 - 612.27

Costco Wholesale Corporation operates an international chain of 785 membership-only warehouses worldwide, 546 of which are in the U.S. It carries quality, brand-name merchandise at lower prices than you’ll typically find through retail sources or conventional warehouses. You can also shop for private label Kirkland Signature™ products.

In fiscal 2019, the company reported $149 billion in net sales, an 8% increase from the previous year. The net income was $3.66 billion, or $8.26 per share, a 17% increase from the previous year. In the U.S. and Canada market, its membership renewal rate reached a record high 91%. The company has since expanded its quality offerings from premium brands like Weber, Sony, Columbia Sportswear and Apple. Costco employs 254,000 personnel worldwide and intends to launch e-commerce operations in Japan and Australia in fiscal 2020.

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Albertsons Companies (NYSE: ACI)

29.34 0.21 (0.72%)
2.53M
15.60B
28.81 - 29.62
19.05 - 37.99

Albertsons is the second-largest traditional grocer in America, operating 2,277 stores under more than 20 banners in 34 states (as of the end of fiscal 2020). Around 75% of stores have pharmacies, while nearly 20% also sell fuel. Albertsons has a significant private-label operation, accounting for around 20% of sales (excluding fuel). While its own brand assortment is mainly manufactured by third parties, Albertsons operates 20 food production plants (as of the end of fiscal 2020). Albertsons is a top-two grocer in two thirds of its major markets (as of early 2021, according to company data), and virtually all of its sales come from the United States.

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Biggest Consumer Defensive Movers of the Day

The movers of the day list may help you identify promising consumer defensive stock. Stock prices often react from news about foreign markets or competition.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

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Premarket Consumer Defensive Stocks
Symbol Last Price Change % Change Trade
BSFC 1.42 0.23 19.32% Trade
EAST 0.7831 0.111 16.56% Trade
AFRI 6.925 0.945 15.8% Trade
ZVIA 3.03 0.37 13.9% Trade
MMMB 1.34 0.15 12.6% Trade
USFD 32.045 3.575 12.55% Trade
PFGC 47.61 4.66 10.84% Trade
CHEF 38.95 3.71 10.52% Trade
HFFG 6.06 0.57 10.38% Trade
PLAG 0.87 0.08 10.05% Trade
Symbol Last Price Change % Change Trade
GNS 6.34 -3.22 -33.69% Trade
YQ 1.79 -0.24 -11.83% Trade
NUZE 0.91 -0.09 -9% Trade
AGRI 2.505 -0.245 -8.91% Trade
WBEV 1.54 -0.13 -7.79% Trade
SANW 0.93 -0.07 -7% Trade
REED 0.1653 -0.012 -6.62% Trade
RIBT 0.6847 -0.047 -6.45% Trade
PETZ 2.755 -0.185 -6.3% Trade
XXII 2.415 -0.155 -6.04% Trade
Market Consumer Defensive Stocks
Symbol Last Price Change % Change Trade
GNLN 0.4003 0.138 52.32% Trade
TUEM 0.37 0.03 8.72% Trade
HLF 25.23 1.64 6.95% Trade
GROV 7.13 0.46 6.89% Trade
GNS 10.11 0.55 5.75% Trade
XXII 2.71 0.14 5.44% Trade
STKL 8.15 0.38 4.89% Trade
LOCL 3.51 0.16 4.77% Trade
HAPP 0.219 0.01 4.53% Trade
SNAX 1.03 0.04 4.04% Trade
Symbol Last Price Change % Change Trade
VEDU 1.71 -0.14 -7.57% Trade
REV 6.67 -0.53 -7.37% Trade
AFRI 5.55 -0.43 -7.2% Trade
PETZ 2.78 -0.16 -5.45% Trade
SMFL 0.515 -0.026 -4.85% Trade
AMBO 0.3524 -0.018 -4.76% Trade
TANH 0.32 -0.015 -4.48% Trade
MF 0.2601 -0.009 -3.35% Trade
NWL 18.919 -0.541 -2.79% Trade
METX 1.63 -0.04 -2.4% Trade
After Hours Consumer Defensive Stocks
Symbol Last Price Change % Change Trade
REED 0.165 0.025 17.85% Trade
WTER 0.43 0.036 9.1% Trade
NBEV 0.315 0.026 9.07% Trade
GNLN 0.2713 0.021 8.51% Trade
HAPP 0.2249 0.017 8.12% Trade
EAST 0.7735 0.033 4.52% Trade
AQB 1.69 0.07 4.32% Trade
YQ 1.83 0.07 3.97% Trade
CLEU 0.728 0.026 3.64% Trade
BRCC 7.24 0.2 2.84% Trade
Symbol Last Price Change % Change Trade
REV 7.56 -0.39 -4.91% Trade
GSUN 19 -0.75 -3.8% Trade
TTCF 6.75 -0.24 -3.44% Trade
SMFL 0.55 -0.014 -2.44% Trade
PME 0.98 -0.02 -2.01% Trade
AGRI 2.46 -0.04 -1.61% Trade
VEDU 1.93 -0.03 -1.54% Trade
EDBL 1.43 -0.02 -1.38% Trade
DOGZ 2.24 -0.03 -1.33% Trade
XXII 2.39 -0.03 -1.24% Trade

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Defensive stock trading is an all-weather type of investment. It can keep your pockets stuffed through market turbulence, even when the wider market is struggling. People can’t cut back on consumer staples (think beverage and tobacco products, household goods, personal products and food and drug retailers). 

Here are 5 consumer defensive stocks that deserve your attention.

Overview: Consumer Defensive Stocks

The consumer sector produces products people need almost on a daily basis. Consumer defensive stocks are great investments in virtually any economic environment, including economic slowdowns.

Unlike cyclical stocks, which are highly dependent on the economic cycle, defensive stocks generate stable profits through all stages of the economic cycle. The simple idea behind investing in defensive stocks is to shield against significant decreases in share prices, which occur during either bear markets or market corrections.

Although consumer defensive sectors offer price stability through the economic cycle, the tradeoff is that they experience less growth during market upswings compared to higher-risk, cyclical sectors. The industry groups considered to be defensive include:

  • Consumer staples
  • Healthcare
  • Commodities
  • Utilities

Best Online Brokers for Consumer Defensive Stock

Online brokers don’t just let you execute and track stock trades. They provide extensive research material, tools to backtest strategies and charting capabilities for better market analysis. Here’s a list of the best brokers in the industry.

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Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks
get started securely through Moomoo’s website
Best For
Active Traders
N/A
1 Minute Review

Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.

Get started right away by downloading Moomoo to your phone, tablet or another mobile device.

Best For
  • Cost-conscious traders
  • Active and Advanced traders
Pros
  • Over 8,000 different stocks that can be sold short
  • Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
  • No minimum deposit to open an account.
Cons
  • No chat support
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Best For
Desktop Trading
N/A
1 Minute Review

E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.

Best For
  • Active traders
  • Derivatives traders
  • Retirement savers
Pros
  • Sophisticated trading platforms
  • Wide range of tradable assets
  • Exceptional customer service
Cons
  • Limited currency trading
  • Higher margin rates than competitors
  • No paper trading on its standard platform
get started securely through Interactive Broker’s website
Best For
GlobalAnalyst Product
N/A
1 Minute Review

This latest groundbreaking technology is IBKR GlobalAnalyst, a new trading tool that helps investors compare the rate of PEG or price-earnings growth valuations and provide more immediate and comprehensive financial metrics of stocks, globally.

Recognizing that stock selection can be challenging for investors to compare the valuations of domestic and international stocks, Interactive Brokers created GlobalAnalyst to offer investors a simple, yet powerful tool to easily evaluate investment opportunities around the world.

Using GlobalAnalyst, investors can search for stocks by region, country, industry, market capitalization and currency to uncover undervalued stocks worldwide. The resulting table displays the current market and financial metrics, including the PEG Ratio. The PEG Ratio is the PE ratio divided by the three-year compound earnings growth rate, and smaller PEG Ratios typically indicate undervalued companies.

Best For
  • Price earnings growth valuations
Pros
  • Easily evaluate investment opportunities
Cons
get started securely through CenterPoint Securities’s website
Best For
Momentum traders
N/A
1 Minute Review

CenterPoint Securities is ideal for active traders who demand access to advanced tools and services. While investors and casual traders are likely to be content with the basic offerings of traditional online brokerages, active traders will benefit from CenterPoint’s suite of advanced trading tools. If you value execution quality, access to short inventory, advanced trading platforms, and accessible customer service, CenterPoint is an excellent choice.

Best For
  • Intermediate to Advanced traders
  • High-volume traders
  • Momentum traders
  • Short sellers
Pros
  • Unrivaled access to short inventory
  • Flexible order routing for improved executions
  • Discounts for active traders
  • Advanced platform with fast executions
  • Reliable customer service
Cons
  • Not designed for beginner or low-volume traders

Features to Look for in Consumer Defensive Stocks

  • Market share is a huge determinant of stock profitability. It’s the proportion of an industry’s total output, capacity or sales that a company is responsible for over a given period. Capturing a dominant share of the market is valuable for 2 main reasons — companies you invest in that capture the lion’s share of the market tend to offer the highest profits and keep up with competitive threats. A leading brand will easily secure a lot of shelf space with retailers. The aim is to increase its sales margin faster than the larger industry, therefore increasing market share over time.  
  • Same-store sales growth helps put revenue data in perspective. Also referred to as comparable store sales, it’s the measure of revenue and sales growth from existing store locations. This metric helps you assess the operating momentum of a business, whether it attracts huge customer traffic and stands out from the competition. Weak comparable store sales could be a sign of scaling business challenges.
  • Profit margins may help you evaluate the earnings power of consumer staple companies. Top consumer staples companies post market-leading profit margins attributable to large sales bases, valuable brands and effective operating structures. Higher margins on this metric often indicate stronger earnings and a greater stock pricing power. 

Defend Your Portfolio Against a Stock Market Shock

Having a few consumer defensive stocks can help you hedge against stock market shocks. Although these stocks aren’t the best performers in a bull market, they usually go up when the market slips. A portfolio containing defensives is more likely to offer a dividend. A regular income is always nice to have, especially during tough economic times.