5 Low-Beta Defensive Stocks to Buy Amid Sinking Consumer Confidence

Americans are on shaky ground as they are not confident about the nation’s economy. The Conference Board said earlier this week that consumer confidence unexpectedly fell in June after rebounding in the prior month.

Job market worries, uncertainty over the impact of President Donald Trump’s tariffs and the ongoing geopolitical tensions have raised concerns about the future of the economy’s health.

Given the uncertainty, it would be ideal to invest in safe-haven defensive stocks from the utility and consumer staples sector, such as Atmos Energy Corporation ATO, NiSource Inc. NI, Fortis, Inc. FTS, Ingredion Incorporated INGR and Altria Group, Inc. MO. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Also, these stocks are from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank.

Consumer Confidence Tanks

The Conference Board said that the consumer confidence index declined to 93, a 5.4-point drop from May’s reading of 98.4 and sharply lower than the consensus estimate of a rise to 100.

The sharp decline in consumer confidence was triggered by growing concerns over job availability, an indication that the labor market was softening because of uncertainty over Trump’s tariffs. The Conference Board’s survey of labor market differential — based on how respondents perceive job availability, whether plentiful or hard to find — fell to 11.1 in June from 12.7 in May, reaching its lowest point in four years.

The White House has reached a trade deal with China and the United Kingdom, two of the biggest trading partners of the United States, but consumers are unclear about the impact of the new tariffs.

Geopolitical Tensions, Uncertainty of Rate Cuts

The Federal Reserve has also been delaying its rate cuts, with Federal Reserve Chairman Jerome Powell saying that the policymakers would wait and see the impact of tariffs on the economy before going for a rate cut.

Trump has been extremely critical of Powell for delaying rate cuts that have been costing the economy billions of dollars. Yet, the central bank has been maintaining a hawkish stance.

Also, the ongoing Middle East crisis involving Iran and Israel, with the United States joining the conflict over the weekend, has unsettled markets. Crude prices have fallen over the past few days following the announcement of a fragile ceasefire by Trump earlier this week. This raised hopes that the tensions between Iran and Israel will de-escalate, but the fears of an oil crisis are far from over. 

5 Low-Beta Defensive Stocks With Growth Potential

Atmos Energy Corporation

Atmos Energy Corporation, along with its subsidiaries, is engaged in the regulated natural gas distribution and storage business. ATO serves nearly 3.3 million customers in more than 1,400 communities across eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy operates more than 73,000 miles of transmission and distribution lines as well as 5,700 miles of interstate pipelines.

Atmos Energy has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the last 60 days. ATO presently carries a Zacks Rank #2. Atmos Energy has a beta of 0.71 and a current dividend yield of 2.22%.

NiSource Inc.

NiSource Inc., together with its subsidiaries, provides natural gas, electricity, and other products and services in the United States. NI’s operating subsidiaries deliver energy to roughly 3.7 million customers in six states — Ohio, Pennsylvania, Virginia, Kentucky, Maryland and Indiana. NiSource has one of the nation’s largest natural gas distribution networks, as measured by the number of customers.

NiSource has an expected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. NI presently has a Zacks Rank #2. NiSource has a beta of 0.54 and a current dividend yield of 2.76%.

Fortis, Inc.

Fortis, Inc. is engaged in the electric and gas utility business. FTS offers regulated utilities comprising electric and gas, as well as engages in non-regulated hydroelectric operations. Fortis operates primarily in Canada, the United States and the Caribbean.

Fortis has an expected earnings growth rate of 3.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.9% over the last 60 days. Currently, FTS carries a Zacks Rank #2. Fortis has a beta of 0.49 and a current dividend yield of 3.76%.

Ingredion Incorporated

Ingredion Incorporated is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries.

Ingredion’s expected earnings growth rate for the current year is 6.1%. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the past 60 days. INGR carries a Zacks Rank #2. Ingredion has a beta of 0.73 and a current dividend yield of 2.33%.

Altria Group, Inc.

Altria Group, Inc. has been evolving with the changing industry dynamics. Given the rising health consciousness and stern government regulations to discourage smoking, MO has been moving beyond traditional cigarettes and expanding in the smokeless category.

Altria Group’s expected earnings growth rate for the current year is 4.9%. The Zacks Consensus Estimate for its current-year earnings has improved 1.7% over the past 60 days. MO currently has a Zacks Rank #2. Altria Group has a beta of 0.60 and a current dividend yield of 6.81%.

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This article originally published on Zacks Investment Research (zacks.com).

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