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3 Defensive Stocks for the Value Investor

These businesses could increase the resilience of your portfolio

Author's Avatar
Alberto Abaterusso
Jun 23, 2021

Summary

  • Procter & Gamble Co, Colgate-Palmolive Co and Dollar General Corp have continued to generate earnings and dividends during economic recessions
  • They offer compelling price-earnings ratios compared to the S&P 500
  • Wall Street sell-side analysts have issued positive recommendations for them
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If you want to enhance the resilience of your portfolio to make it stronger in 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, these stocks offer compelling price-earnings ratios compared to the S&P 500's 45.11, and Wall Street sell-side analysts have issued positive recommendations for them.

Procter & Gamble Co

The first stock investors could be interested in is Procter & Gamble Co (

PG, Financial), a Cincinnati, Ohio-based multinational consumer branded packaged goods company.

The company saw its trailing 12-month earnings per diluted share ($4.96 as of the end of the most recent full year) increase by 0.8% per annum over the past five years. The dividend per share for the trailing 12 months ($3.0284 as of the end of the most recent full year) increased by 3.1% per annum over the past five years.

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GuruFocus assigned a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10 to the company.

The share price closed at $133.12 on Tuesday for a market capitalization of $326.12 billion, a price-earnings ratio of 24.52 and a 52-week range of $115.04 to $146.92.

On Wall Street, as of June, the stock has a median recommendation rating of overweight with an average target price of $147.99 per share.

Colgate-Palmolive Co

The second stock investors could be interested in is Colgate-Palmolive Co (

CL, Financial), a New York-based multinational household and personal products company.

The company saw its trailing 12-month earnings per diluted share ($3.14 as of the end of the most recent full year) increase by 11.6% per annum over the past five years. The dividend per share for the trailing 12 months ($1.75 as of the end of the most recent full year) increased by 3.2% per year over the past five years.

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GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 8 out of 10 to the company.

The stock traded at $81.29 at close on Tuesday for a market capitalization of $68.80 billion, a price-earnings ratio of 26.23 and a 52-week range of $71.21 to $86.41.

On Wall Street, as of June, the stock has a median recommendation rating of hold with an average target price of $87.18 per share.

Dollar General Corp

The third stock investors could be interested in is Dollar General Corp (

DG, Financial), a Goodlettsville, Tennessee-based owner and operator of 17,266 discount stores in 46 states in the U.S.

The company saw its trailing 12-month earnings per diluted share ($10.62 as of the end of the most recent full year) increase by 19.4% every year over the past five years. The dividend per share for the trailing 12 months ($1.44 as of the end of the most recent full year) increased by 9.9% per annum over the past five years.

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GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 9 out of 10 to the company.

The share price was $214.84 at close on Tuesday for a market capitalization of $50.84 billion, a price-earnings ratio of 19.80 and a 52-week range of $173.50 to $225.25.

On Wall Street, as of June, the stock has a median recommendation rating of overweight with an average target price of $238.64 per share.

Disclosure: I have no positions in any securities mentioned in this article.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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