Consumer confidence — a key determinant of the economy’s health — rebounded strongly during the month of November to hit a nine-year high, after a dismal show in October. This indicates that the economy is on the recovery trail and the results of the presidential election have not dampened consumer spending. This was also supported by a significant upward revision by the Commerce Department in consumer spending during the third quarter, which played a major role in better-than-expected third-quarter GDP growth.
However, several factors have been plaguing the global economy. Headwinds like an unfavorable currency, food deflation, declining volumes, potential price wars, a competitive environment, slowdown in international markets and other global issues adversely impacted consumer staples stocks in the quarter. The probable interest rate hike by the U.S. Federal Reserve in December has further spurred market volatility and unnerved investors.
Amid this widespread uncertainty, investors must be wondering where to park their money. Therefore, targeting safer bets for now rather than going for stocks with high earnings growth potential (only) can prove to be a prudent move.
The Winning Strategy: Investment in Dividend Stocks
With the U.S. economy picking up steam, investors should opt for dividend stocks. Not only do these stocks offer higher income in the current low-rate environment but also provide a cushion against equity market risks.
Moreover, dividend stocks are historically less volatile and are proven outperformers over the long term. These stocks are a safe bet as dividends generally act as a hedge against economic uncertainty.
Why Consumer Staples Stocks?
Surging consumer confidence and indications of a stronger economy ahead make the consumer staples sector attractive. Investing in consumer staples stocks is safer because of their defensive nature. In fact, consumer staples stocks have the potential to counter these macro-economic headwinds.
However, selecting winning stocks may prove to be difficult.
Dividend yield assesses the amount of income received in proportion to the share price. Amid the current volatility, it could be a smart strategy to buy stocks that yield good dividends, thus ensuring a steady income.
Thus, based on a solid Zacks Rank #1 (Strong Buy) or #2 (Buy), and dividend yields of more than 3%, we have zeroed in on four stocks that have the potential to ride out the impending volatility.
High Yielding Consumer Staples Dividend Stocks to Buy: Flowers Foods, Inc. (FLO)
Georgia-based Flowers Foods, Inc. (FLO) produces and markets bakery products in the United States. It has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
With a dividend yield of 4.18% and a beta value of 0.82, this stock seems an attractive pick.
High Yielding Consumer Staples Dividend Stocks to Buy: Time Warner Inc (TWX)
New York-based Time Warner Inc (TWX) carrying a Zacks Rank #3, operates as a media company that publishes magazines in the United States, the United Kingdom, and internationally.
It has a beta value of 0.77 and a dividend yield of 4.69%.
High Yielding Consumer Staples Dividend Stocks to Buy: Tupperware Brands Corporation (TUP)
Tupperware Brands Corporation (TUP) is a global direct seller of premium, innovative products across multiple brands and categories through an independent sales force.
This Zacks Rank #3 company yields a dividend of 4.97%.
High Yielding Consumer Staples Dividend Stocks to Buy: Unilever plc (ADR) (UL)
Unilever plc (ADR) (UL) operates in the fast-moving consumer goods market in the Africa, Americas, Asia Pacific, Europe, and Middle East.
This Zacks Rank #3 company has a beta value of 0.78 and a dividend yield of 3.57%.
Zacks’ Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>
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