Markets
KMB

Negative Rates Point to Consumer Staples Stocks

The JP Morgan international bond index currently shows ~25% of gov't bonds are in negative interest rate territory. More importantly, the size of the negative rate gov't bond market has grown rapidly -- and dramatically -- from zero in mid-2014 to more than US$6 trillion today.

What happens to the risk ladder in asset-based investing with negative rates? It lights a fire under stable-growth, dividend-paying defensive stocks!

Believe it or not, of late, the MOST attractive defensive top-down S&P 500 sector has been Consumer Staples .

With no end in sight for negative government bond rates, investors should investigate holdings in defensive sectors of the S&P 500. When the U.S. 10-year Treasury bond trades at a +1.7% annual rate, Consumer Staples stocks oftentimes can offer a dividend rate well above +2.0% annually. These companies also can generate annual EPS growth above +7%, to top it off. In short, your stock portfolio will couple together two 'safe-haven' U.S. economy-based investment fundamentals. These can work hard for you.

The Zacks system shows the current top Consumer Staples industry is Consumer Products-Misc. Staples .

· The 9-company strong Misc-Staples space shows seven of nine share tickers get a Zacks #2 Rank (Buy) at the moment.

· That adds up to a stellar #8 out of 265 Zacks Industry rank.

· There have been 11 positive EPS estimate revisions of late, and 0 negative revisions.

You can't find a better defensive U.S. stock niche to mine… right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

KIMBERLY CLARK (KMB): Free Stock Analysis Report

ENERGIZER HLDGS (ENR): Get Free Report

BLUE BUFFALO (BUFF): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

KMB ENR

Other Topics

Stocks

Latest Markets Videos