Asked by: Roke Terhalle
business and finance automotive industry

What does Consumer Defensive mean?

Last Updated: 25th June, 2020

Market Cap (M): $918

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In respect to this, what is a consumer defensive stock?

Consumer Defensive. Consumer defensive portfolios seek capital appreciation by investing in equity securities of U.S. or non-U.S. companies that are engaged in the manufacturing, sales, or distribution of consumer staples.

Likewise, is consumer defensive the same as consumer staples? Consumer staples include food, beverages, drugs, hygiene products and medical supplies. Consumer staple stocks are often held in portfolios as a defensive investment to counter the volatility of consumer discretionary stocks in a weak stock market.

Also to know is, what is an example of a defensive stock?

Water, gas, and electric utilities are an example of defensive stocks because people need them during all phases of the business cycle. Utility companies also are thought of as benefiting from slower economic environments because interest rates tend to be lower and their competition to borrow funds is much less.

What are the defensive sectors?

The Defensive super sector has three sectors: Consumer Defensive, Healthcare, and Utilities. The Sensitive super sector also has four sectors: Communication Services, Energy, Industrials, and Technology.

Related Question Answers

Lyle Bakhtinoff

Professional

Are energy stocks defensive?

Utilities are the classic defensive stock because as a regulated public good they operate within strict parameters for profit, return on investment, and dividends. But upstream energy providers are great defensive stocks, too.

Dior Schmukler

Professional

What are examples of consumer discretionary stocks?

Automobiles, durable goods, and apparel are examples of consumer discretionary products. Companies offering goods and services related to entertainment and leisure are also in the sector.

Wade Chorfi

Professional

What are the best consumer staple stocks?

They include:
  • PepsiCo, up 24%, its best year since 2000;
  • Costco, up 48%, its best year since 1998;
  • Procter & Gamble, up 28%, its best year since 1997;
  • Campbell Soup, up 45%, its best year since 1997;
  • General Mills, up 35%, its best year since 1991;
  • Hershey, up 43%, its best year since 1986.

Salman Querido

Explainer

Is Coca Cola a consumer staple?

Consumer Staples
Companies that provide direct-to-consumer products that, based on consumer purchasing habits, are typically considered nondiscretionary. Examples: Food products (Campbell Soup Co., Archer Daniels Midland Co.). Beverages (The Coca-Cola Co., Anheuser-Busch Companies, Inc.).

Kseniia Funnell

Explainer

What stocks do well during war?

  • S&P 500. 3,380.16. +6.22(+0.18%)
  • Dow 30. 29,398.08. -25.23(-0.09%)
  • Nasdaq. 9,731.18. +19.21(+0.20%)
  • Russell 2000. 1,687.58. -6.16(-0.36%)
  • Crude Oil. 52.25. +0.83(+1.61%)

Hamada Bartulo

Explainer

What stocks are consumer staples?

?Consumer Staples Stocks with the Most Momentum
Consumer Staples Stocks with the Most Momentum
Tyson Foods Inc. (TSN) 90.15 60.8
Coty Inc. (COTY) 10.85 43.7
S&P 500 N/A 27.3
Consumer Staples Select Sector SPDR ETF (XLP) N/A 22.1

Lauren Soy

Pundit

Is McDonald's a defensive stock?

McDonald's stock (ticker: MCD) has risen more than 22% this year, just edging ahead of the S&P 500. The defensive nature of the shares helped shelter them during market turmoil, and last week, the stock gained following an in-line second-quarter earnings report that showed strong same-store sales performance.

Gayane Valentinovitch

Pundit

What stocks are in the consumer discretionary sector?

The 10 biggest consumer discretionary stocks
Company Description Market Capitalization
Lowe's (NYSE:LOW) Home improvement retailer $81 billion
TJX Companies (NYSE:TJX) Off-price apparel and home goods retailer $68 billion
General Motors (NYSE:GM) Automobile manufacturer $59 billion
Target (NYSE:TGT) Home products retailer $45 billion

Aurore Andaluz

Pundit

Are industrials defensive?

Companies in the utility industry, for example, are defensive because consumer demand does not decline as much during downturns. Consumers need electricity, water, heating, and air conditioning, whether the economy is in a recession or not. The other primary defensive industries are consumer staples and healthcare.

Javad Thormahlen

Pundit

What are some good defensive stocks?

A Bit Of Luck Helps, Too
Company Name Exchange:Ticker Composite Rating
Lamb Weston Holdings (LW) 33
AutoZone (AZO) 94
Starbucks (SBUX) 93
Pinnacle West Capital (PNW) 87

Claudia Abramchikoff

Pundit

Are utilities good investments?

Retirees, conservative investors and other income-generators gravitate towards utilities. Growth investors tend to eschew these stocks because utility companies often have limited growth prospects. The recession-resistant nature of utilities makes utility stocks a good defensive stock.

Aurel Noseda

Teacher

Are banks cyclical?

All stocks are to some extent cyclical, but some are far more so than others. Banks: It is interesting that you mentioned banks as an example of a defensive stock. This is why they tend to trade at low PE ratios and high dividend yields relative to the rest of the industrial stock sectors.

Messoud Donderis

Teacher

What are defensive stocks in a recession?

The "defensive stocks" category consists of companies in the food, home supplies, healthcare, utilities, and real estate segments. Such stocks also tend to pay dividends to their shareholders, guaranteeing a small yet stable form of income.

Confesor Omont

Teacher

What is a defensive portfolio?

A defensive investment strategy entails regular portfolio rebalancing to maintain one's intended asset allocation; buying high-quality, short-maturity bonds and blue-chip stocks; diversifying across both sectors and countries; placing stop loss orders; and holding cash and cash equivalents in down markets.

Laurencia Dillenkofer

Teacher

What is Blue Chip Stock?

A blue-chip stock is a huge company with an excellent reputation. A blue-chip stock typically has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector, and is more often than not a household name.

Kiowa Krolls

Reviewer

What sectors are considered value?

The retail, bank, energy and industrial sectors are typically considered to be value plays, while cyclical sectors like technology are viewed as growth groups.

Carly Dunnett

Reviewer

What are examples of consumer staples?

Examples of consumer staples include food, drugs, beverages, tobacco, and basic household products. These are things that people are unlikely to reduce their demand for when times are tough because people see them as basic needs.

Dakota Ichel

Reviewer

What can you buy in a recession?

Options to consider include federal bond funds, municipal bond funds, taxable corporate funds, money market funds, dividend funds, utilities mutual funds, large-cap funds, and hedge funds.

Grit Turta

Reviewer

Is McDonald's consumer discretionary?

Consumer Discretionary Sector
Types of consumer discretionary companies include fast-food restaurants, entertainment products and services, clothing and automobiles. Some of the largest companies in this sector include McDonald's, Walt Disney, Amazon.com and Ford Motor Co.