Deutsche Bank Out With Top Consumer ‘Risk Off’ Picks for 2019

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Needless to say, the past few days have been a bright spot for investors after a brutal October and November, but one thing seems clear across Wall Street: 2019 may be a difficult year and investors should prepare for some tough sledding. The combination of trade concerns, rising interest rates and slowing growth have turned investors toward safer sectors, but there can be risk in some of the safest stocks.

In a new research report, Deutsche Bank makes the case that some of the safest areas in the market have become expensive and could prove to be a trap for worried investors looking for safe harbors.

The Deutsche Bank report noted this:

At present, given the market’s defensive bias, enthusiasm over better-than-expected top-line momentum coming out of the third quarter, and newfound optimism over future gross margin stability/expansion, Consumer Staples (especially Home and personal care/ Beverages) has rapidly become one of the most expensive sectors in the market.

With that cautionary note in mind, the firm does have some top picks in the sector for cautious investors. Here we feature seven stocks from three categories that look like good selections right now.

Top Core Consumer Packaged Goods

Coca-Cola

This top Warren Buffet holding not only offers safety but an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.

Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. With coolers getting packed for picnics, parades and vacations you can bet that they will be stuffed with products from this iconic American company. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Coca-Cola investors are paid an outstanding 3.14% dividend. The Deutsche Bank price target for the stock was last seen at $53, while the Wall Street consensus target price is $51.48. The stock closed Wednesday’s trading at $49.71 apiece.

International Flavors & Fragrances

This is the other top core holding at Deutsche Bank. International Flavors & Fragrances Inc. (NYSE: IFF) creates, manufactures and supplies flavors and fragrances (including cosmetic active ingredients) used to impart or improve flavor or fragrance in a range of consumer products. The company operates in two segments.

Its Flavors segment offers flavor compounds that are sold to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food and sweet products.