5 All-Weather Stocks to Protect Your Portfolio from a Bear Market
In the current, uncertain market environment, one of the best strategies to protect one’s portfolio is to invest in stocks capable of withstanding all market and economic conditions. With fears...
In the current, uncertain market environment, one of the best strategies to protect one's portfolio is to invest in stocks capable of withstanding all market and economic conditions. With fears of a looming recession, we think investors could look to add the stocks of all-weather companies Constellation Brands (STZ), Johnson & Johnson (JNJ), Sysco (SYY), Medtronic (MDT), and Vistra (VST) to protect their portfolios from a bear market. Read on.
Over the past few weeks, the stock market has suffered significantly from the multi-decade high inflation and the Fed's efforts to tame it by tightening its monetary policy. The Ukraine-Russia war, rising energy prices, and a decline in real GDP in the first quarter of 2022 have also been causes of concern for investors. Although the markets ended in the green yesterday, the major indices have declined more than 10% year-to-date.
Economies go through periods of prosperity and uncertainty, and these economic cycles are reflected in the stock market. So, considering the current uncertainties surrounding the economy and the stock market, investing in stocks capable of withstanding any economic or market condition could be a great strategy.
Fears of the economy slipping into a recession are pushing the stock market into bear market territory. Against this backdrop, we think investors could look to add all-weather stocks Constellation Brands, Inc. (STZ), Johnson & Johnson (JNJ), Sysco Corporation (SYY), Medtronic plc (MDT), and Vistra Corp. (VST) to their portfolios. The nature of these companies' businesses should help their stocks weather a bear market.
Constellation Brands, Inc. (STZ)
Victor, N.Y.-based STZ produces, imports, markets, and sells beer, wine, and spirits. It provides beer primarily under the Corona Extra, Corona Premier, Corona Familiar, Corona Light, Corona Refresca, Corona Hard Seltzer, Modelo Especial, Modelo Negra, Modelo Chelada, Pacifico, and Victoria brands. The company offers wine under the 7 Moons, Cook's California Champagne, Cooper & Thief, Crafters Union, Kim Crawford, Meiomi, Mount Veeder, and other brands.
On March 30, 2022, STZ launched its first ready-to-drink and multi-serve boxed wine cocktails named Next Round Cocktails. STZ's VP of Emerging Brands, Ann Stockman, said, "Next Round Cocktails represents Constellation Brands' commitment to innovate for consumer-leading trends, such as creatively intersecting the growing consumer interest we see in the $696.50 million pre-mixed cocktails category and the $903.20 million premium boxed wine category."
For its fiscal year ended February 28, 2022, STZ's net sales increased 2.3% year-over-year to $8.82 billion. The company's gross profit increased 5.4% year over year to $4.70 billion. Also, its total current assets increased 9.3% year-over-year to $3.32 billion.
For the quarter ending Aug. 31, 2022, STZ's EPS is expected to increase 18.9% year-over-year to $2.83. Its revenue for its fiscal year 2024 is expected to increase 6.8% year-over-year to $10.03 billion. Over the past nine months, the stock has gained 14% in price to close the last trading session at $244.37.
STZ's POWR Ratings reflect solid prospects. The company has an overall B rating, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has an A grade for Growth and a B grade for Sentiment and Quality. It is ranked #17 of 35 stocks in the A-rated Beverages industry. To see the other ratings for STZ for Value, Momentum, and Stability, click here.
Johnson & Johnson (JNJ)
JNJ in New Brunswick, N.J., researches, develops, manufactures, and sells a range of products in the healthcare field. It operates through the Consumer, Pharmaceutical, and Medical Devices segments.
On Feb. 1, 2022, JNJ's Janssen Pharmaceutical Companies announced that the U.S. FDA had approved an expanded label for CABENUVA to be administered every two months to treat HIV-1 in virologically suppressed adults. Candice Long, President, Infectious Diseases & Vaccines, Janssen Therapeutics, said, "With this milestone, adults living with HIV have a treatment option that further reduces the frequency of medication."
JNJ's reported sales increased 4.9% year-over-year to $23.42 billion for the first quarter, ended March 31, 2022. The company's adjusted net earnings rose 2.9% year-over-year to $7.12 billion. Also, its adjusted EPS came in at $2.67, representing a 3% increase year-over-year.
Analysts expect JNJ's EPS and revenue for its fiscal year 2023 to increase 6.2% and 4%, respectively year-over-year to $10.91 and $100.35 billion, respectively. It surpassed the Street's EPS estimates in each of the trailing four quarters. Over the past six months, the stock has gained 12.7% in price to close the last trading session at $179.46.
JNJ's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Stability and a B grade for Quality. Within the Medical – Pharmaceuticals industry, it is ranked #7 out of 166 stocks. Click here to see the other ratings of JNJ for Growth, Value, Momentum, and Sentiment.
Sysco Corporation (SYY)
SYY in Houston. Tex., markets and distributes food and related products primarily to the food service or food-away-from-home industry. It operates through U.S. Foodservice Operations; International Foodservice Operations; SYGMA; and Other segments. The company distributes frozen foods, such as meats, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry foods; fresh meats and seafood; dairy products; and fresh produce. It also supplies various non-food items.
On May 19, 2022, SYY and Daimler Truck North America jointly announced a Letter of Intent (LOI) to deploy up to 800 battery-electric Freightliner eCascadia Class 8 tractors. SYY's EVP, Chief Supply Chain Officer Marie Robinson, said, "This investment shows our commitment to sustainability and growing responsibly and will ultimately help us meet our goal of reducing our direct carbon emissions by 27.5% by 2030.
SYY's sales increased 42.9% year-over-year to $16.90 billion for the third quarter, ended April 2, 2022. The company's non-GAAP net earnings increased 216.1% year-over-year to $362.90 million. Also, its non-GAAP EPS came in at $0.71, representing a 222.7% increase year-over-year.
For its fiscal year 2022, SYY's EPS and revenue are expected to increase 123.6% and 32.7%, respectively, year-over-year to $3.22 and $68.08 billion. Over the past six months, the stock has gained 13.9% in price to close the last trading session at $82.84.
SYY's POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value and Sentiment. It is ranked #6 of 85 stocks in the B-rated Food Makers industry. To see the other ratings of SYY for Momentum, Stability, and Quality, click here.
Medtronic plc (MDT)
Headquartered in Dublin, Ireland, MDT develops, manufactures, distributes, and sells device-based medical therapies to hospitals, physicians, clinicians, and patients worldwide. It operates through four segments: Cardiovascular Portfolio, Neuroscience Portfolio, Medical-Surgical Portfolio, and Diabetes Operating Unit.
On May 26, 2022, MDT and DaVita Inc. (DVA) announced their intent to form a new, independent kidney care-focused medical device company to enhance the patient treatment experience and positive outcomes. MDT's RCS business and NewCo's CEO Ven Manda said, "Our singular focus on end-to-end kidney health solutions will position this new company to make a measurable difference in the lives of more than three million patients with kidney failure globally - a figure expected to double over the next decade."
For its fiscal fourth quarter, ended April 29, 2022, MDT's cardiovascular revenue increased 1.8% year-over-year to $2.96 billion. The company's non-GAAP EPS came in at $1.52, representing a 2% increase year-over-year. Also, its non-GAAP net income increased 0.4% year-over-year to $2.03 billion.
Analysts expect MDT's EPS and revenue for its fiscal year 2024 to increase 9.3% and 5% year-over-year to $6.35 and $34.66 billion, respectively. It surpassed consensus EPS estimates in three of the trailing four quarters. The stock has declined 3.8% year-to-date to close the last trading session at $99.44.
MDT's POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.
It has a B grade for Stability. It is ranked #15 out of 150 in the Medical – Devices & Equipment industry. Click here to see the other ratings of MDT for Growth, Value, Momentum, Sentiment, and Quality.
Vistra Corp. (VST)
Dallas, Tex.-based VST operates as an integrated retail electricity and power generation company. The company operates through the Retail, Texas, East, West, Sunset, and Asset Closure segments. It retails electricity and natural gas to residential, commercial, and industrial customers. It is involved in electricity generation, wholesale energy purchases and sales, commodity risk management, fuel production, and fuel logistics management activities.
On May 23, 2022, VST announced that its DeCordova Energy Storage facility in Granbury, Tex., was online and storing and releasing electricity to the ERCOT grid. VST CEO Curt Morgan said, "No doubt, a project of this size and an overall investment this ambitious solidifies Vistra's position as a market leader in investing in, owning, and operating emission-free power generation in Texas and beyond while balancing affordability and reliability."
For its fiscal first quarter, ended March 31, 2022, VST's net loss narrowed 86% year-over-year to $284 million. The company's ongoing operations adjusted EBITDA came in at $547 million, compared to an adjusted EBITDA loss of $1.20 billion in the year-ago period. Also, its cash, cash equivalents, and restricted cash for the quarter ended March 31, 2022, increased 75.8% year-over-year to $1.05 billion.
For its fiscal 2022, VST's EPS is expected to increase 174% year-over-year to $1.99. Its revenue for the quarter ending June 30, 2022, is expected to increase 53.6% year-over-year to $3.94 billion. Over the past year, the stock has gained 59.7% in price to $25.93.
VST's POWR Ratings reflect solid prospects. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.
It has an A grade for Growth and a B grade for Value and Momentum. Within the Utilities – Domestic industry, it is ranked #3 out of 66 stocks. To see the other ratings of VST for Stability, Sentiment, and Quality, click here
STZ shares were unchanged in premarket trading Friday. Year-to-date, STZ has declined -2.00%, versus a -13.91% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master's degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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