Investing

8 Defensive Stocks to Avoid a Market Sell-Off for the Summer of 2017

Altria

Altria Group Inc. (NYSE: MO) is the king of domestic tobacco with very limited currency exposure in a post–Philip Morris International world. It seems hard to endorse tobacco companies when their yields are smaller than telecom stocks and when the pressure to get healthier keeps growing. The stark reality is that states and cities rely heavily on taxes from tobacco sales, so much so that they never want to totally kill the tobacco companies. The move to vaping actually has even helped keep tobacco sales up because vapers sometimes want that old-school cigarette burn. Altria has vaping from NuMark and Green Smoke. It also has U.S. Smokeless Tobacco, and it has the John Middleton business for cigars and pipe tobacco.

Altria shares traded recently at $71.60, with a consensus analyst price target of $73.18. Its 52-week trading range is $60.82 to $76.55, and it has close to a 3.5% dividend yield. Altria has a loose promise to keep raising dividends in the years ahead with a payout ratio of about 80% of its adjusted earnings per share.

American Water Works

American Water Works Co. Inc. (NYSE: AWK) is the premiere water name for investors to own as it is the largest publicly traded U.S. water and wastewater utility in America. It provides drinking water, wastewater and other related services to around 15 million people in almost every state in America and parts of Canada. After years of strong performance, its shares have reached a maturing phase, but you just cannot at all get more defensive than water. The company has been growing the dividend and it plans to keep doing that, with a current yield of about 1.9%.

American Water Works was last seen at $80.50, within a 52-week range of $69.41 to $85.24. The consensus target price is $82.09.

AT&T

AT&T Inc. (NYSE: T) held up better than rival Verizon during earnings season. That may be temporary or it could just be the next target in the four-way wireless wars with Sprint and T-Mobile. AT&T’s pending merger with Time Warner has some investors concerned and has other investors excited. That’s what makes a ballgame, but this is still rather defensive even when you consider that it acquired DirecTV and has a $246 billion market cap.

With shares near $40.05, AT&T has a 52-week range is $36.10 to $43.89. Its consensus price target is $42.80, and Jefferies is even more positive. The big kicker here for investors is that AT&T currently pays 4.9% dividend yield, and it has raised its dividend for 33 consecutive years.

Coca-Cola

Coca-Cola Co. (NYSE: KO) had been a drag and serial disappointing stock on the Dow for too long, but that had been the case for years. Now Coca-Cola is moving away from its endless sugar-water sales. With its outside investments in sports beverages, water, specialty drinks and more, one analyst report just called for a big turnaround and sees Coca-Cola becoming a total-beverage thematic play.

Coca-Cola shares were recently trading around $43.00, with a 52-week range of $39.88 to $46.01. Its consensus analyst target is $44.36, and it has a current dividend yield of 3.4%. Credit Suisse was recently very bullish as well. For more good news on dividends, outside of having Warren Buffett as a top investor, Coca-Cola is in the club of companies that have increased dividends for more than 50 consecutive years.