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10 Consumer Defensive Dividend Stocks with Over 2% Yield

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·10 min read
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In this article, we will be taking a look at 10 consumer defensive dividend stocks with over 2% yield. To skip our detailed analysis of consumer defensive stocks, you can go directly to see the 5 Consumer Defensive Dividend Stocks with Over 2% Yield.

With the pandemic's imposition of social distancing requirements, mask-mandates, and generally leading to a drastically impacted economy with major shutdowns, the consumer defensive sector was perhaps amongst the most heavily impacted. At the end of 2020, the state of the consumer industry was dire as unemployment rose to about 14.8% in April 2020, according to a Congressional Research Service report last updated this June.

However, come 2021 and vaccine production and rollouts, the economy has begun to reopen, resulting in more consumer defensive stocks like The Procter & Gamble Company (NYSE: PG), the Colgate-Palmolive Company (NYSE: CL), Unilever PLC (NYSE: UL), and The Coca-Cola Company (NYSE: KO) managing to retake the stage.

A report by Wells Fargo Advisors on 2021 Midyear Equity Sector Outlook in its section on the consumer discretionary sector has mentioned a more positive outlook for the sector in 2021. It has been mentioned that as more stimulus money is beginning to be spent by consumers in the US, parts of the sector that had been the most hard-hit by the pandemic can expect to bounce back in the coming quarters. The sector itself was, at the time of the publishing of this report, trading at 33.4 times the NTM consensus estimate of $41.84, for instance, and its price-to-earnings, or P/E ratio had surpassed the five-year record valuation of 25.2 times. Pre-pandemic, the consumer defensive sector had been historically trading at 1.4 times as compared to the S&P 500, but by June 2021, it had begun trading at 1.6 times relative to the S&P 500.

The Wells Fargo report has thus advised investors to look towards consumer defensive stocks with more optimism than they perhaps would have during the beginning of the pandemic. The stocks part of this sector have been outperforming their "secular growth counterparts" as the pandemic's impact on the economy grows less harsh with growing vaccination rates. Hence, we have decided to compile a list of 10 consumer defensive dividend stocks with over 2% yield, which can be found below.

Just like the consumer defensive sector, the entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Photo by Viki Mohamad on Unsplash

Without further ado, let's look at 10 consumer defensive dividend stocks with over 2% yield.

Our Methodology

Using the Russell 2000 Index benchmark and Insider Monkey's data of about 866 hedge funds, we have selected Russell 2000 small-cap dividend stocks that are among the most popular stocks hedge funds are buying today. For each stock, we have mentioned its number hedge fund holders and dividend yield, ranking them from the lowest to the highest yield and going up to a yield of over 6%. We have also selected stocks with positive analysts' ratings and good fundamentals.

Consumer Defensive Dividend Stocks with Over 2% Yield

10. Calavo Growers, Inc. (NASDAQ: CVGW)

Number of Hedge Fund Holders: 9 Dividend Yield: 2.2%

Calavo Growers, Inc. (NASDAQ: CVGW) is a marketer and distributor of perishable foods, such as avocados, to grocery retailers and foodservice customers, among others. It ranks 10th on our list of consumer defensive dividend stocks with over 2% yield and operates through its Fresh Products, Calavo Foods, and Renaissance Food Group segments.

Lake Street analyst Ben Klieve currently holds a Buy rating on shares of Calavo Growers, Inc. (NASDAQ: CVGW), alongside a $70 price target as of this August.

In the fiscal second quarter of 2021, Calavo Growers, Inc. (NASDAQ: CVGW) had an EPS of $0.43, beating the previous quarter's EPS of $0.17. The company’s revenue was $276.82 million, beating estimates by $9.19 million.

By the end of the first quarter of 2021, 9 hedge funds out of the 866 tracked by Insider Monkey held stakes in Calavo Growers, Inc. (NASDAQ: CVGW) worth roughly $64.1 million. This is compared to 10 hedge funds in the previous quarter with a total stake value of approximately $73.8 million.

Like The Procter & Gamble Company (NYSE: PG), the Colgate-Palmolive Company (NYSE: CL), Unilever PLC (NYSE: UL), and The Coca-Cola Company (NYSE: KO), Calavo Growers, Inc. (NASDAQ: CVGW) is a good stock to invest in.

9. Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC)

Number of Hedge Fund Holders: 8 Dividend Yield: 2.4%

Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is a natural and organic groceries retailer operating in the US. The company ranks 9th on our list of consumer defensive dividend stocks with over 2% yield and provides consumers with natural and organic products like bread, olive and coconut oil, honey, and others.

Wolfe Research analysts hold an Outperform rating on shares of Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC).

In the fiscal third quarter of 2021, Natural Grocers by Vitamin Cottage, Inc. (NGVC) had an EPS of $0.22. The company’s revenue was $258.62 million.

By the end of the first quarter of 2021, 8 hedge funds out of the 866 tracked by Insider Monkey held stakes in Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) worth roughly $28.7 million. This is compared to 10 hedge funds in the previous quarter with a total stake value of approximately $24.1 million.

Like The Procter & Gamble Company (NYSE: PG), the Colgate-Palmolive Company (NYSE: CL), Unilever PLC (NYSE: UL), and The Coca-Cola Company (NYSE: KO), Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC) is a good stock to invest in.

8. The Andersons, Inc. (NASDAQ: ANDE)

Number of Hedge Fund Holders: 12 Dividend Yield: 2.5%

The Andersons, Inc. (NASDAQ: ANDE) is an agriculture company working in the trade, ethanol, plant nutrient, and rail sectors in the US and globally. The company ranks 8th on our list of consumer defensive dividend stocks with over 2% yield.

This May, Kenneth Zaslow, an analyst at BMO Capital, raised his price target on shares of The Andersons, Inc. (NASDAQ: ANDE). The new price target on the stock is $33, versus the old $26 price target. Zaslow also holds a Market Perform rating on The Andersons, Inc. (NASDAQ: ANDE) shares.

In the second quarter of 2021, The Andersons, Inc. (NASDAQ: ANDE) had an EPS of $1.30, beating estimates by $0.71. The company’s revenue was $3.27 billion, up 73.20% year over year and also beating estimates by $990.69 million. The Andersons, Inc. (NASDAQ: ANDE) has gained 10.65% in the past 6 months and 22.86% year to date.

By the end of the first quarter of 2021, 12 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Andersons, Inc. (NASDAQ: ANDE) worth roughly $21.5 million. This is compared to 12 hedge funds in the previous quarter with a total stake value of approximately $26.8 million.

Like The Procter & Gamble Company (NYSE: PG), the Colgate-Palmolive Company (NYSE: CL), Unilever PLC (NYSE: UL), and The Coca-Cola Company (NYSE: KO), The Andersons, Inc. (NASDAQ: ANDE) is a good stock to invest in.

7. Nu Skin Enterprises, Inc. (NYSE: NUS)

Number of Hedge Fund Holders: 19 Dividend Yield: 2.8%

Nu Skin Enterprises, Inc. (NYSE: NUS) is a personal products company developing and distributing personal care and wellness products for sale across the world. The company offers a range of skincare and cleansing products, among others, and ranks 7th on our list of consumer defensive dividend stocks with over 2% yield.

Deutsche Bank analyst Faiza Alwy just this May raised the price target on Nu Skin Enterprises, Inc. (NYSE: NUS) shares. The new price target is $64, as compared to the previous $57 target. Additionally, Alwy currently also has a Hold rating on shares of Nu Skin Enterprises, Inc. (NYSE: NUS).

In the second quarter of 2021, Nu Skin Enterprises, Inc. (NYSE: NUS) had an EPS of $1.15, beating estimates by $0.09. The company’s revenue was $704.05 million, up 14.97% year over year and also beating estimates by $0.68 million. Nu Skin Enterprises, Inc. (NYSE: NUS) has gained 9.73% in the past 6 months and 11.51% in the past year.

By the end of the first quarter of 2021, 19 hedge funds out of the 866 tracked by Insider Monkey held stakes in Nu Skin Enterprises, Inc. (NYSE: NUS) worth roughly $327 million. This is compared to 22 hedge funds in the previous quarter with a total stake value of approximately $328 million.

Like The Procter & Gamble Company (NYSE: PG), the Colgate-Palmolive Company (NYSE: CL), Unilever PLC (NYSE: UL), and The Coca-Cola Company (NYSE: KO), Nu Skin Enterprises, Inc. (NYSE: NUS) is a good stock to invest in.

6. Strategic Education, Inc. (NASDAQ: STRA)

Number of Hedge Fund Holders: 16 Dividend Yield: 3.1%

Strategic Education, Inc. (NASDAQ: STRA) is a provider of post-secondary education and non-degree programs in the consumer discretionary sector. The company operates through its Strayer University, Capella University, and Australia/New Zealand segments. It ranks 6th on our list of consumer defensive dividend stocks with over 2% yield.

As of this July, BMO Capital's Jeffrey Silber has an Outperform rating on shares of Strategic Education, Inc. (NASDAQ: STRA). Alongside this rating, the analyst also placed a $90 price target on the stock.

In the second quarter of 2021, Strategic Education, Inc. (NASDAQ: STRA) had an EPS of $1.55, beating estimates by $0.04. The company’s revenue was $299.17 million, up 16.94% year over year and beating the previous quarter's revenue of $290.34 million.

By the end of the first quarter of 2021, 16 hedge funds out of the 866 tracked by Insider Monkey held stakes in Strategic Education, Inc. (NASDAQ: STRA) worth roughly $232 million. This is compared to 15 hedge funds in the previous quarter with a total stake value of approximately $229 million.

Like The Procter & Gamble Company (NYSE: PG), the Colgate-Palmolive Company (NYSE: CL), Unilever PLC (NYSE: UL), and The Coca-Cola Company (NYSE: KO), Strategic Education, Inc. (NASDAQ: STRA) is a good stock to invest in.

Click to continue reading and see the 5 Consumer Defensive Dividend Stocks with Over 2% Yield.

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Disclosure: None. 10 Consumer Defensive Dividend Stocks with Over 2% Yield is originally published on Insider Monkey.