If you want to make your portfolio more resilient so it will be stronger during recessions, the three defensive stocks listed below may be suitable. These stocks have continued to generate earnings and dividends during economic recessions as they offer goods and services on which people do not typically cut their spending in times of financial distress.
Furthermore, as of the writing of this article, these stocks offer compelling price-earnings ratios compared to the S&P 500's 34.28, and Wall Street sell-side analysts have issued positive recommendations for them.
Acme United Corp
The first stock investors could be interested in is Acme United Corp (ACU, Financial), a Fairfield, Connecticut-based supplier of first aid, measuring and safety products as well as cutting and sharpening tools to households, offices and schools in North America. The company serves several industrial markets as well.
The company saw its trailing 12-month earnings per diluted share ($2.31 as of the end of the most recent full year) increase by 8.9% per annum over the past five years. The dividend per share for the trailing 12 months ($0.49 as of the end of the most recent full year) increased by 5.9% per annum over the past five years.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 8 out of 10 to the company.
The share price closed at $42.30 on Friday for a market capitalization of $147.35 million, a price-earnings ratio of 12.59 and a 52-week range of $21.37 to $48.30.
On Wall Street, as of July, the stock has one recommendation rating of buy with a target price of $51.50 per share.
MGP Ingredients Inc
The second stock investors could be interested in is MGP Ingredients Inc (MGPI, Financial), an Atchison, Kansas-based producer and supplier of distilled spirits, specialty wheat proteins and starch food ingredients to manufacturers and processors of finished packaged goods as well as bakeries in North America and internationally.
The company saw its trailing 12-month earnings per diluted share ($2.37 as of the end of the most recent full year) increase by 8.6% per annum over the past five years. The dividend per share for the trailing 12 months ($0.48 as of the end of the most recent full year) increased by 52.2% per year over the past five years.
GuruFocus assigned a score of 7 out of 10 for both the financial strength rating and the profitability rating of the company.
The stock traded at $59.65 at close on Friday for a market capitalization of $1.31 billion, a price-earnings ratio of 22.09 and a 52-week range of $34.43 to $76.68.
On Wall Street, as of July, the stock has a median recommendation rating of overweight with an average target price of $71.67 per share.
B&G Foods Inc
The third stock investors could be interested in is B&G Foods Inc (BGS, Financial), a Parsippany, New Jersey-based manufacturer and seller of shelf-stable and frozen foods and household products. The company’s customers are supermarket chains, food service outlets, mass merchants, warehouse clubs, non-food outlets and specialty distributors in North America and Puerto Rico.
The company saw its trailing 12-month earnings per diluted share ($2.04 as of the end of the most recent full year) increase by 3.4% every year over the past five years. The dividend per share for the trailing 12 months ($1.90 as of the end of the most recent full year) increased by 5.6% per annum over the past five years.
GuruFocus assigned a financial strength rating of 3 out of 10 and a profitability rating of 8 out of 10 to the company.
The share price was $28.72 at close on Friday for a market capitalization of $1.86 billion, a price-earnings ratio of 14.22 and a 52-week range of $25.26 to $47.84.
On Wall Street, as of July, the stock has a median recommendation rating of hold with an average target price of $28.63 per share.
