Negative sentiment flows into the market after the collapse of Silicon Valley Bank (SVB)Many financial stocks are feeling the pull.
With the uncertainty and volatility holding the market up temporarily, it may be worthwhile to review defensive sectors of the market, such as the consumer staples sector.
Three Top-Ranked Stocks in the Zacks Consumer Staples Sector – The Hershey Company HSYlamb weston lwand Inter Perfumes IPAR — may all be considerations for investors looking to shore up defensive capabilities.
Below is a chart showing the year-to-date performance of all three stocks, with the S&P 500 composite as a benchmark.
Image source: Zacks Investment Research
On top of the improved earnings outlook, all three pay dividends, providing another beneficial advantage. Let’s take a closer look at each.
lamb weston
Lamb Weston Holdings is a leading global manufacturer, marketer and distributor of value-added frozen potato products. Over the past several months, the company’s bottom line outlook has improved across all timeframes, relegating it to Zacks Rank #2 (Buy).
Image source: Zacks Investment Research
Lamb Weston beat the Zacks Consensus EPS estimate by 70% big time in its latest quarterly release. Quarterly revenue totaled $1.3 billion, 10% ahead of expectations and growing 30% year-over-year.
The market was pleased with the quarterly results and the already good trend continued. The green arrows in the chart below show this.
Image source: Zacks Investment Research
And to top it off, LW’s annual dividend currently yields 1.1%, with the company’s payout increasing by more than 6% over the past five years.
Image source: Zacks Investment Research
the hershey company
The Hershey Company is the largest chocolate manufacturer in North America and a global leader in chocolate and non-chocolate confectionery. The stock currently sports a Zacks Rank #2 (Buy).
Image source: Zacks Investment Research
In addition, the company’s profits are expected to expand nicely, with a Zacks Consensus EPS estimate of $9.39 for its current fiscal year (FY23), suggesting double-digit growth of 10% year-over-year. Is. And in FY24, earnings are expected to grow by another 8%.
Image source: Zacks Investment Research
While Hershey’s 1.7% annual dividend yield remains below the Zacks Consumer Staples sector average, its 9% five-year annual dividend growth rate helps bridge the gap.
Image source: Zacks Investment Research
Inter Perfumes
Inter Parfums is engaged in manufacturing, distribution and marketing of a wide range of Fragrances and related products.
Inter Parfums impressed in its latest quarterly release, beating bottom-line expectations by more than 100% and delivering an 11% revenue surprise. Below is a chart that shows the company’s strong revenue trend on a quarterly basis.
Image source: Zacks Investment Research
Like LW, shares of Inter Parfums rose for the second straight time post-earnings as market participants took better-than-expected results.
Image source: Zacks Investment Research
The company is committed to rapidly rewarding its shareholders by increasing its dividend payout by more than 15% over the past five years. Currently, IPAR’s dividend yields 1.5% annually.
ground level
After the collapse of Silicon Valley Bank, some investors may be interested in moving into sectors that offer a higher degree of safety, including consumer staples.
The products of these companies can generate demand in the face of many economic conditions, helping to explain why they are generally viewed as defensible.
And all three stocks above from the Zacks Consumer Staples sector – The Hershey Company HSYlamb weston lwand Inter Perfumes IPAR – May be considered for those looking to enhance defensive capabilities.
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