3 Defensive Dividend Stocks to Protect Against Pre-Election Volatility

The Resilient Rise of Zoetis

Among the entities that stand out in this defensive arena is Zoetis Inc., a stalwart player in the realm of animal health. With a legacy spanning over seven decades, Zoetis has become a beacon of stability in a sea of market fickleness, akin to a lighthouse guiding ships through rough waters.

A Fortified Fortress

Despite a YTD dip of 4%, Zoetis has clung tenaciously to its pillars of stability amidst the tumultuous market winds. The company’s market cap looms large at around $85.1 billion, offering an anchor of steadfastness when the market tides turn rough.

A Flourishing Haven

Zoetis’ five-year streak of consecutive dividend increases speaks volumes about its resilience. The company sails ahead, paying out a quarterly dividend of $0.432 per share with an annualized dividend of $1.73 per share.

Visionary Leadership and Financial Prowess

In August, Zoetis made waves as it surpassed all expectations with its second-quarter earnings. Like an eagle soaring high above the clouds, the company posted a revenue of $2.4 billion, signaling an 8% rise from the previous year—a testament to its unyielding spirit in the face of adversity.

The Bright Horizon

Guided by CEO Kristin Peck’s steady hand, Zoetis raised its fiscal 2024 guidance with the confidence of a sure-footed mountaineer conquering new heights. The company anticipates revenue growth between $9.10 billion and $9.25 billion, paving the way for a brighter future.

Diving into Kenvue – A Shield Against Turbulence

Turning our gaze to another bastion of stability, Kenvue Inc. emerges as a formidable contender in the landscape of consumer health, a shield repelling the arrows of uncertain market forces.

The Sturdy Bulwark

With a rich heritage dating back over a century, Kenvue boasts a diversified portfolio of trusted brands, standing strong with a market cap of $43.1 billion. The stock has surged 23% in the past three months, outshining broader market indices like a gleaming beacon in the night sky.

Ensuring Growth and Stability

Kenvue’s recent dividend increase underscores its unwavering commitment to shareholders, offering $0.205 per share and a hearty 3.64% yield. This move aligns with the company’s endeavor to drive sustainable growth and provide a steady hand amid market turmoil.

Financial News: Unlocking the Performance of Kenvue and American Water Works

By Ronald Tech

September 6, 2024

Diving into Kenvue’s Financial Performance

Embarking on a financial voyage, Kenvue witnessed a meteoric rise of over 14.6% following its Q2 earnings report that defied Wall Street’s expectations. Despite a slight year-over-year dip, the company’s net sales of $4 billion surpassed the projected $3.9 billion mark. Adjusted EPS soared by 3.3%, settling at $0.32 and outstripping forecasts by a noteworthy 14.5%. With a majestic leap, the gross margin escalated to 59.1% from 55.5% in the same quarter the previous year, showcasing a robust surge in performance and pricing strategy.

Peering into the horizon, CEO Thibaut Mongon expressed, “With the progress achieved in the first half of the year in enhancing productivity and freeing up resources, we are now accelerating investments across our esteemed global brands portfolio to connect with more consumers and actualize our long-term value creation algorithm.”

For fiscal 2024, management cemented its outlook, foreseeing net sales growth ranging between 1% to 3%, while organic net sales growth is poised between 2% and 4%. Additionally, adjusted EPS is slated to land within the bracket of $1.10 to $1.20.

Glancing ahead, analysts envision a 16.3% dip in Kenvue’s bottom line for the fiscal year 2024, culminating in $1.08 per share, before resurging by 13.9% to reach $1.23 per share in fiscal 2025.

American Water Works: A Refreshing Oasis of Stability

Steering towards American Water Works, a stalwart valued at $28.15 billion, the New Jersey-based company, with roots stretching back to 1886, stands as a premier name in the regulated water and wastewater utility domain in the U.S. that caters to over 14 million individuals across 14 states and 18 military installations.

With a YTD surge of approximately 9%, American Water Works stock has been a beacon of stability. Over the last six months, the stock catapulted by 19.6%, outpacing the broader SPX’s 5.9% return during the same period.

Besides offering a delightful dividend yield, the stock appears attractively priced at current levels, trading beneath its own five-year averages. The company, with a legacy of 15 consecutive years of dividend increments and a payout ratio of 58.83%, exudes dedication towards providing alluring returns to its investors.

After a mixed Q2 earnings report released on July 31, American Water Works witnessed a 1.5% spike in its shares the following trading day. The company experienced a 4.8% upsurge in revenue year over year, amassing $1.2 billion, surpassing estimates by 4.1%. Although its EPS of $1.42 fell short of Wall Street’s anticipation, it hovered nearly unchanged compared to the previous year.

Accelerating forward, CEO M. Susan Hardwick noted, “As results remain relatively stable year over year, it aligns with our expectations, as we anticipate the outcomes of our recent regulatory initiatives to materialize later this year.”

For fiscal 2024, the management foresees an EPS range between $5.25 and $5.30 and remains firmly on track to meet its 2024 capital investment objectives. By the year-end, American Water Works envisages channeling about $3.1 billion across its operational avenues.

Looking through the lens of analysts, American Water Works is expected to witness a 7.4% profit growth year over year to hit $5.26 per share in fiscal 2024, followed by an 8.2% leap to $5.69 per share in fiscal 2025.