Standard & Poor's research shows that consumer staples, utilities, and health-care stocks outperform the market 80%-90% of the time during recessions. As my Foolish colleagues Tim Hanson and Brian Richards point out, this outperformance owes to their reliability and healthy dividend policies.
With that in mind, I used our new CAPS screening tool to discover which defensive stocks our 165,000-member CAPS investment community loves most.
These stocks have:
- Market capitalizations greater than $10 billion.
- Debt-to-equity ratios below 50%, which indicates rock-solid balance sheets.
- Trailing three-year revenue growth above 5%, to demonstrate enduring demand for products.
- Dividend yields greater than 2%.
- Four- or five-star ratings from our CAPS community.
Company |
Sector |
Debt-to-Equity |
3-Year Revenue Growth |
Dividend Yield |
---|---|---|---|---|
Merck |
Health Care |
26% |
7% |
4.4% |
Coca-Cola |
Staples |
18% |
6% |
3.4% |
Medtronic |
Health Care |
42% |
9% |
2.2% |
Archer Daniels Midland |
Staples |
47% |
13% |
2.3% |
Becton, Dickinson |
Health Care |
29% |
6% |
2.1% |
Telecomunicacoes de Sau Paulo |
Utilities |
18% |
7% |
4.3% |
China Mobile |
Utilities |
7% |
21% |
3.4% |
Data from Motley Fool CAPS.
Of course, screens are merely a first step in the stock-selection process. As Miguel de Cervantes -- whose overly idealistic Don Quixote flails impulsively after unachievable dreams -- reminds us, "Diligence is the mother of good fortune." Come and join us on Motley Fool CAPS to dig into these companies further. Let our 165,000-strong (and counting) CAPS community help you polish your portfolio.
For related Foolishness: