5 Best Defensive Stocks to Buy Now

4. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 64

The consumer staples sector is on the stable, less volatile end of the stock market. The Coca-Cola Company (NYSE:KO) has a track record for boosting its dividends for well past 50 years and has a payout ratio of 70.25%. As of July 4, the stock has a forward dividend yield of 2.73%, which makes it a dividend-paying consumer defensive stock to invest in right now.

Investors are piling into The Coca-Cola Company (NYSE:KO). Insider Monkey spotted the stock on 64 hedge fund portfolios at the end of the first quarter of 2022. These hedge funds held collective stakes worth $29.17 billion in The Coca-Cola Company (NYSE:KO), up from $28.61 billion in the previous quarter with 70 positions.

This May, BofA added The Coca-Cola Company (NYSE:KO) to its “U.S. 1” list, which contains stocks that the bank has a Buy rating on. This June Morgan Stanley named The Coca-Cola Company (NYSE:KO) among its top stock picks that the bank believes are safe from the risk of a recession. Morgan Stanley analysts have a buy-side Overweight rating on The Coca-Cola Company (NYSE:KO).

As of March 31, Berkshire Hathaway holds the most of The Coca-Cola Company (NYSE:KO). Warren Buffett’s hedge fund owns 400 million shares of the company which amounts to a stake of $24.79 billion. The investment covers 6.82% of Berkshire Hathaway’s 13F portfolio.

ClearBridge Investments, an investment management firm, mentioned The Coca-Cola Company (NYSE:KO) in its fourth-quarter 2021 investor letter. Here is what the firm said:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”