Some on Wall Street feel that technical stock analysis is the key to finding directions and market trends. Others feel it is practically useless as it fails to factor in black-swan-type one-off events. The black swan theory is a metaphor that describes an event that comes as a surprise, has a major effect and is often inappropriately rationalized after the fact with the benefit of hindsight. One of the best examples is the horrific events of 9/11.
Those who do follow technical analysis see the S&P 500 breaking through the 3,900 level as a big deal, and what was formally support for the venerable index now likely has turned into a resistance point for the markets. With a 75-basis-point increase in the federal funds rate all but a given on Wednesday, it makes sense for investors to not “fight the Fed” and move to defensive dividend stocks.
Defensive stocks are typically those of companies that supply items or services that are needed regardless of the state of the economy. Toss in the kicker of a dependable dividend, and you have the type of companies that worried investors should prefer now.
We screened our 24/7 Wall St. research database looking for defensive dividend leaders. We found seven that are Buy rated at major Wall Street firms and look like outstanding ideas now. It is important to remember that no single analyst report should be used as the sole basis for any buying or selling decision.
Coca-Cola
This remains a top Warren Buffet holding, as he owns 400 million shares. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It has an incredibly strong worldwide brand, with 40% overseas sales.
The company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Investors receive a 2.96% dividend. HSBC has a $75 target price, and the consensus target is $69.80. Coca-Cola stock closed on Monday at $59.99.
General Mills
General Mills Inc. (NYSE: GIS) manufactures and markets branded consumer foods worldwide. The company offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream, nutrition bars, wellness beverages, and savory and grain snacks, as well as various organic products, including frozen and shelf-stable vegetables.
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