10 Best Counter Cyclical and Defensive Stocks to Invest In

3. Walmart Inc. (NYSE:WMT)

Market Capitalization as of September 11: $626.45 Billion

Number of Hedge Fund Investors in Q2 2024: 95

Walmart Inc. (NYSE:WMT) is one of the best countercyclical stocks to invest in as a retail powerhouse operating supercenters, supermarkets, hypermarkets, and warehouse clubs. More than a tenth of its total income is generated from health and wellness products that are always in demand. It’s one of the top discount retailers in the world.

The retail behemoth provides affordable choices and essential home goods, making it a leading choice despite consumers reducing their spending on non-essential goods. Additionally, the surging need for home delivery and curbside pickup has led to a 21% increase in Walmart Inc. (NYSE:WMT) ‘s quarterly online sales.

WMT currently holds a significant edge in retail space compared to its rivals. Its expanding online sales and networks with other companies could further boost its success. This is particularly valid if the firm’s major investments in artificial intelligence lead to the improvements it aims for.

Walmart has never reported quarterly earnings that were lower than the previous year’s figures since 2017, underlining continuous growth regardless of economic conditions. It delivered better than expected Q2 2204 results, with revenues totaling $169.3 billion against the $168.6 billion expected. Earnings per share totaled $0.67 a share against $0.65 expected. The company upped its guidance for the full year. Sales growth is expected to range between 3.75% and 4.75%, from an initial guidance of 3% to 4% and a guidance for earnings growth of 6% to 9%.

Walmart Inc. (NYSE:WMT) is also becoming an advertising behemoth that further affirms why it is one of the best countercyclical stocks to invest in. In the second quarter, its U.S. ad business, Walmart Connect, grew by 30% and proved to be more profitable than the 4% operating margin in the retail industry.

While trading at a forward price-to-earnings multiple of 32, the stock offers a dividend yield of 1.05% for generating passive income.

Overall, 95 hedge funds held Walmart Inc. (NYSE:WMT) at the close of Q2 2024, with total stakes amounting to $9.19 billion. As of June 30, Fisher Asset Management was the largest shareholder, holding a position worth $3.08 billion.