We recently published a list of Top 10 High Dividend Yielding Consumer Defensive Stocks To Buy. In this article, we are going to take a look at where Ambev S.A. (NYSE:ABEV) stands against other top high dividend yielding consumer defensive stocks to buy.
Consumer defensive stocks tend to perform well in uncertain times because they sell essential items such as household products, healthcare items, and food and beverages, among others. Such companies also tend to have a strong pricing power which helps them to easily pass on increasing costs to consumers.
The US market continues to struggle due to concerns over tariffs, geopolitical issues, and politics. In such times, consumer defensive stocks offer a way to protect one’s portfolio from this uncertainty.
When such shares also offer a high dividend yield, it performs a killer combination, loved by defensive investors looking to park their money for reliable passive income. We therefore decided to come up with a list of the top 10 high-dividend-yielding consumer defensive stocks.
To come up with the list of top 10 high-dividend consumer defensive stocks, we only considered stocks from the consumer defensive sector with a market cap of at least $10 billion and a dividend yield of at least 4%.
A close-up on several cans of freshly brewed beer in a commercial brewery.
Ambev S.A. (NYSE:ABEV)
Ambev S.A. (NYSE:ABEV) is the producer, distributor, and seller of draft beer, malt and food, beer, carbonated soft drinks, non-alcoholic and non-carbonated products, and other alcoholic beverages.
Ambev S.A. (NYSE:ABEV) is currently trading at a dividend yield of 5.53%. The company reiterated its resolve to continue this payout last year when it allocated R$2 billion in share repurchases and R$6.7 billion in dividends last year. Moreover, according to 19 different analyst ratings, ABEV has the highest target price of $5, which means it could be more than double from the current levels if the bull thesis plays out.
Moving forward, Ambev S.A. (NYSE:ABEV) expects the cost of goods sold to grow between 5.5% and 8.5% due to the decrease in the Brazilian Real’s purchasing power and higher aluminum costs. CEO Lisboa said the firm will focus on enhancing pricing strategies to drive margin expansion, though ideally it will want the currency headwinds to subside for a more predictable business performance.
Overall, ABEV ranks 3rd on our list of top high dividend yielding consumer defensive stocks to buy. While we acknowledge the potential of ABEV as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as ABEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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