Consumer Products

Four Stocks That Can Hold Up Well in a Big Market Sell-Off

Lee Jackson

Every indicator tracked on Wall Street says the market is expensive, very expensive. The only legitimate reason to keep buying stock at these levels is a good one: It’s a better buy than the bond market, especially the Treasury market. So what are investors to do, needing to put capital to work but concerned they are going in right before a sell-off?

A new report from Stifel makes the case that there are four large-cap, very solid consumer staples stocks that are not only still priced good, but may have solid upside for investors. While the firm is neutral on the food sector, the analysts are incrementally more positive on the U.S. and international tobacco sector.

Here are the four large-cap consumer staples stocks on which Stifel now has a rating of Buy.

Altria Group Inc. (NYSE: MO) is a top tobacco name to buy, and the company’s Marlboro brand is one of the most recognizable in the world. The Stifel analysts believe the stock has solid downside support owing to the generous dividend yield, which remains at a significant premium in relation to the 10-year Treasury rate.

The Stifel report points out that cash flow generation and the return of cash to Altria shareholders remain key facets of the company’s total shareholder return, and the analysts expect support of the strong dividend, which they believe will continue to climb, and strong share repurchase activity ($800 million estimated in 2014). The actual current dividend yield to shareholders is 4.6%. The Stifel price target for the stock is $43. The Thomson/First Call estimate is $40. Altria closed Tuesday at $41.68 a share.

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