I'll admit it, when I first came across Campbell's Soup (CPB -3.15%) stock, I passed over it because it didn't seem like a company that makes soups and sauces was the most exciting of investments. But I'll also be the first to admit that I couldn't have been more wrong.

There's nothing boring about a company that's raising its sales outlook for the year ahead at a time when many others are cutting guidance. There's also nothing boring about a stock that's up 37% over the past year at a time when the S&P 500 and Nasdaq Composite are in bear market territory.

Adding to Campbell's investment appeal is the defensive nature of its business, its reasonable valuation, and its market-beating dividend. Lets dive in.

Two parents and two kids cooking a meal together on the stove at home.

Image source: Getty Images.

Uniquely defensive 

Campbell's is as well-positioned as any company to weather a tough economic environment. Soups and sauces are consumer staples, and demand for these types of products should remain steady even in a recession. If anything, these types of mainstays could see an uptick in demand at a time when consumers look to cut costs by cooking at home instead of eating out.

CEO Mark Clouse says that "with consumers preparing about 80% of meals from home, our brands are well-positioned for sustained growth, delivering customers the quality, value and convenience they seek for simple at-home meals and quick scratch cooking."

The company points out that a consumer can use its products to make a meal like spaghetti carbonara or chicken parmesan for average price points of $1.51 and $2.31 per serving, respectively, versus a cost of $21.89 and $18.15 for the same meals at the average restaurant. You can't underestimate these types of savings and the difference they can make for the average family at a time when most consumers are trying to be sensible about spending.

In addition to its strong performance over the past year, the stock's defensiveness is highlighted by the fact that Campbell's grew organic sales by 15% and adjusted EBITDA by 15% this quarter. The company says it was able to mitigate the effects of inflation by increasing prices and improving productivity.

More than just soup 

There's more to Campbell's than just its namesake soups. The company features a thriving snacks business, which includes brands like Goldfish, Pepperidge Farm, Snack Factory Pretzel Crisps, Emerald Nuts, and many more. Products like Pepperidge Farm's Milano or Chessmen cookies are the types of small, everyday luxuries that some consumers turn to as a small reward or indulgence in lieu of larger luxury purchases they might treat themselves to during a better economic environment.

Meanwhile, Goldfish has ranked as the No. 1 snack brand with teens for three years in a row in Piper Sandler's annual Taking Stock With Teens survey. Goldfish is staying fresh in consumers' minds by releasing innovative, new collaborations like its limited edition Pumpkin Spice Grahams with Dunkin' Donuts, which seems well-suited to today's age of viral media.

Palatable valuation and tasty dividend  

Campbell's trades at a valuation of 21 times earnings and 17 times next year's earnings, which isn't necessarily cheap but is palatable for a high-quality defensive stock that is preserving investor capital through the downturn.

In addition to this reasonable valuation, Campbell's Soup is also appealing with a market-beating dividend that yields nearly 3%. While the dividend hasn't grown much in the last few years, Campbell's has paid out a dividend since 1989, and there's something to be said for that consistency.

While this isn't the type of stock that you buy expecting super-charged returns a year from now, Campbell's Soup is well-positioned for the current market environment. The company's products will continue to sell even in the event of a recession, and it is working to refresh its brands and staying relevant with younger consumers. Its valuation is reasonable, and the long-standing dividend adds to the stock's appeal.

Campbell's Soup has been around since 1869, so investors don't have to worry about it going away anytime in the foreseeable future. This is the type of steady stock that investors can buy to add ballast and stability to their portfolio amid a choppy market.