We recently published a list of 10 Defensive Dividend Stocks To Buy During Market Sell Off. In this article, we are going to take a look at where Tyson Foods, Inc. (NYSE:TSN) stands against other defensive dividend stocks to buy during market sell off.
The importance of defensive dividend stocks only becomes clear when the broader market is taking a hit. The S&P is down nearly 8% in a month while Nasdaq has lost over 11.41%. Investors are wondering how to protect themselves from volatility and the answer lies in defensive stocks.
Here is a key distinction investors must understand. Growth stocks rely on price appreciation to generate shareholder returns, something that is hard to achieve when the broader market is facing a severe sell-off. Dividend stocks, on the other hand, became more attractive. They not only help reduce the volatility but as their price goes down, their yield becomes more attractive.
We therefore decided to identify the best stocks for such a scenario. To come up with the list of 10 defensive dividend stocks to buy during a market sell-off, we only considered stocks belonging to the Consumer Defensive sector with a market cap of at least $2 billion and a dividend yield of at least 3%.
A farmer in a field, bringing in the harvest of live fed cattle for the company.
Tyson Foods, Inc. (NYSE:TSN)
Tyson Foods, Inc. (NYSE:TSN) is a food company that operates in Pork, Beef, Chicken, and Prepared Foods. It distributes its products through meat distributors, military commissaries, grocery wholesalers, live markets, and other stores and vendors. A relatively subdued performance in the last year has meant that investors are relying on the 3.34% dividend yield for monetary gains.
Tyson Foods (NYSE:TSN) has a median price target of $64.5 according to Wall Street, based on data from 16 different analysts. The stock is trading just above its lowest price target of $58 with the highest price target of $75. These aren’t very attractive numbers, but for a stable business that pays out a healthy dividend, there is enough upside for investors looking to reduce volatility in their portfolio.
The stock is trading at a forward PE of 16.3. TSN’s highest revenue generator, the beef segment, is expected to decline by 1% in terms of production. However, this is made up for in the 2% increases in both chicken and pork segments. The prepared foods segment should top off a relatively stable year for the company, bringing in a total operating income of just over $2 billion.
Tyson Foods (NYSE:TSN) may not be the ideal growth story for investors but during volatile times, it is the go-to stock for income investors.
Overall,TSN ranks 8th on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of TSN 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 TSN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center