5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 61
Costco Wholesale Corporation (NASDAQ:COST), a big-box retailer, is among the best defensive stocks to buy right now because of robust demand for the company’s products and Costco Wholesale Corporation’s (NASDAQ:COST) pricing power over peers. Costco Wholesale Corporation (NASDAQ:COST) owns and operates a variety of discount stores, and as of June 23, the company has 833 warehouses spread throughout the world.
As of June 9, Atlantic Equities analyst Daniela Nedialkova has a $615 price target and buy-side Overweight rating on Costco Wholesale Corporation (NASDAQ:COST). The analyst noted that the company continues to deliver “strong comp momentum”, which can help it offset gross margin pressures.
In addition to analysts, institutional investors are also bullish on the big-box retailer. Insider Monkey found 61 hedge funds having stakes in Costco Wholesale Corporation (NASDAQ:COST) at the close of Q1 2022. These stakes amounted to $5.41 billion, up from $5.40 billion a quarter ago with 57 positions.
As of March 31, Ken Fisher’s Fisher Asset Management is the dominating shareholder in Costco Wholesale Corporation (NASDAQ:COST), owning over 4.22 million shares of the company that carry a price tag of $2.43 billion.
ClearBridge Investments named Costco Wholesale Corporation (NASDAQ:COST) among other stocks in its Q4 2021 investor letter, here is what the investment management firm had to say:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
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.”
3. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 72
The Procter & Gamble Company (NYSE:PG) is another mature dividend-paying company that has been consistent with growing its dividends for 65 years now and is therefore a compelling consumer defensive stock to invest in right now. The Procter & Gamble Company (NYSE:PG) has a 5-year dividend CAGR of 5.48% and a payout ratio of 60.72%. As of July 4, the stock has gained 7.45% over the past twelve months and has a forward dividend yield of 2.50%. Moreover, The Procter & Gamble Company’s (NYSE:PG) trailing-twelve-month FCF currently sits at $13.95 billion, which allows the company to remain consistent with further growing its dividends.
As of June 21, Deutsche Bank analyst Steve Powers has a $157 price target and Buy rating on The Procter & Gamble Company (NYSE:PG).
At the end of the first quarter of 2022, 72 hedge funds disclosed ownership of stakes in The Procter & Gamble Company (NYSE:PG). These funds held collective stakes worth $6.06 billion in the company. Of these, Rajiv Jain’s GQG Partners was the most prominent shareholder in the company owning over 9.91 million shares of the company.
2. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 76
AbbVie Inc. (NYSE:ABBV) develops, manufactures, and sells pharmaceutical products worldwide. One key feature that makes AbbVie Inc. (NYSE:ABBV) rank among the top 5 defensive stocks to buy now is the company’s track record of growing its dividends. As of July 4, AbbVie Inc. (NYSE:ABBV) has gained 13.57% since the beginning of 2022 and is offering a forward dividend yield of 3.67%.
On June 23, AbbVie Inc. (NYSE:ABBV) declared a quarterly cash dividend of $1.41 per share of the company’s common stock. The dividend is payable on August 15 to investors of record on July 15. AbbVie Inc. (NYSE:ABBV) has consistently grown its dividends for almost a decade now and has a 5-year dividend CAGR of 17.50%.
As of May 23, SVB Leerink analyst David Risinger has an Underperform rating and a $140 price target on AbbVie Inc. (NYSE:ABBV).
At the end of Q1 2022, 76 hedge funds were long AbbVie Inc. (NYSE:ABBV) with stakes worth $3.66 billion. This is compared to 82 positions in the preceding quarter with stakes of $3.74 billion.
In the first quarter of 2022, Arrowstreet Capital raised its stakes in AbbVie Inc. (NYSE:ABBV) by 427%, bringing them to $754.15 million. Arrowstreet Capital is the most bullish hedge fund on AbbVie Inc. (NYSE:ABBV).
Here is what Carillon Tower Advisers had to say about AbbVie Inc. (NYSEABBV) in its first-quarter 2022 investor letter:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. AbbVie (NYSE:ABBV) is a research-based biopharmaceutical company. Shares gained after the company reported earnings that missed revenue but beat earnings-per-share estimates. Discussion around the report was mixed but skewed positive.”
1. Johnson & Johnson (NYSE:JNJ)
Number Of Hedge Fund Holders: 83
As of July 4, Johnson & Johnson (NYSE:JNJ) has gained 4.65% since the beginning of 2022 and has a forward dividend yield of 2.52% along with free-cash-flows of $19.73 billion. The demand for pharmaceutical products is expected to remain robust and the healthcare sector is one of the least volatile and noncyclical sectors to invest in. Johnson & Johnson (NYSE:JNJ), having acquired its industry-leading position, presents an attractive entry point for investors to weather a bear market and also recession-proof their portfolios.
Analysts are bullish on Johnson & Johnson (NYSE:JNJ) and the stock has consensus buy-side ratings. As of May 17, Citi analyst Joanne Wuensch has a $205 price target and a Buy rating on Johnson & Johnson (NYSE:JNJ). Later this May, SVB Leerink analyst David Risinger assumed coverage of Johnson & Johnson (NYSE:JNJ) with an Outperform rating and a $200 price target. Moreover, on June 22, Johnson & Johnson (NYSE:JNJ) was initiated at Daiwa with an Outperform rating and a $180 price target.
At the close of Q1 2022, 83 hedge funds were long Johnson & Johnson (NYSE:JNJ) with stakes worth $7.40 billion. This is compared to 83 positions a quarter ago with stakes of $7.38 billion. As of March 31, Arrowstreet Capital owns the most shares in the company which carry a price tag of $1.17 billion.
You can also take a look at 10 Defensive Stocks in Billionaire Ray Dalio’s Latest Portfolio and Ken Fisher Loves These 10 Defensive Stocks.
