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3 Defensive Stocks for the Value Investor

These businesses could enhance the resilience of your portfolio

Author's Avatar
Alberto Abaterusso
Oct 10, 2021

Summary

  • Vector Group, Nu Skin Enterprises and Andersons 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 make your portfolio more resilient so that it will be strong enough to withstand recessions, the following defensive stocks may be suitable. Except for a few short periods over the last decade, 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, even in times of financial distress.

Furthermore, as of the time of writing, these stocks offer compelling price-earnings ratios compared to the S&P 500's 34.25, and Wall Street sell-side analysts have issued positive recommendations for them.

Vector Group

The first stock investors could be interested in is Vector Group Ltd. (

VGR, Financial), a Miami, Florida-based tobacco company.

Over the past five years, the trailing 12-month earnings per diluted share (60 cents as of the end of the most recent full year) increased by 8% on average per annum. The trailing 12-month dividend per share (80 cents as of the end of the most recent full year) instead declined 5.1% on average per annum, though paid continuously in the last decade.

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GuruFocus assigned a financial strength rating of 4 out of 10 and a profitability rating of 8 out of 10 to the company.

The share price closed at $13.85 on Friday for a market capitalization of $2.13 billion, a price-earnings ratio of 10.911 and a 52-week range of $9.015 to $15.311.

On Wall Street as of October, the stock has one strong buy recommendation rating.

Nu Skin Enterprises

The second stock investors could be interested in is Nu Skin Enterprises Inc. (

NUS, Financial), a Provo, Utah-based developer and distributor of skincare products, various nutritional supplements and weight management products.

Over the past five years, the trailing 12-month earnings per diluted share ($3.63 as of the end of the most recent full year) was, on average, up by 8.6% every year. The trailing 12-month dividend per share ($1.5 as of the end of the most recent full year) increased by 1.4% every year.

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GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10 to the company.

The stock traded at $40.56 at close on Friday for a market capitalization of $2.03 billion, a price-earnings ratio of 8.93 and a 52-week range of $39.47 to $63.85.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $60.40 per share.

Andersons

The third stock investors could be interested in is Andersons Inc. (

ANDE, Financial). Headquartered in Maumee, Ohio, Andersons operates as an agribusiness company.

On average, the trailing 12-month earnings per diluted share (23 cents as of the end of the most recent full year) neither increased nor decreased over the past five years. The dividend per share for the trailing 12 months (70 cents as of the end of the most recent full year) increased by 3.8% per annum over the past five years.

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GuruFocus assigned a financial strength rating of 4 out of 10 and a profitability rating of 5 out of 10 to the company.

The share price was $31.92 at close on Friday for a market capitalization of $1.06 billion, a price-earnings ratio of 14.51 and a 52-week range of $18.0197 to $34.41.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $36 per share.

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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.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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