10 Defensive Dividend Stocks To Buy During Market Sell Off

6. Cal-Maine Foods, Inc. (NASDAQ:CALM)

Cal-Maine Foods, Inc. is the producer, grader, packager, marketer, and distributor of egg products and shell eggs. It provides conventional eggs and specialty eggs. The stock’s 7.17% forward dividend yield is attractive, though questions about its sustainability remain. The company has a solid recent history of paying out dividends so one can expect it to continue, even if not at over 7% yield.

Cal-Maine Foods is a global powerhouse in egg production. About half of the company’s sales come from just 3 customers, namely Walmart & Sam’s Club, Publix, and H-E-B. This allows the company flexibility in streamlining its operations and keeping its costs low. Another factor that helps the company is its control of the supply chain, controlling the process from the breeding of hens to the distribution of the eggs.

CALM is also adjusting its business to meet the growing demand of cage-free eggs. People are increasingly choosing eggs laid by hens that aren’t confined to small cages. This trend means the growth rate of cage-free eggs is way higher than traditional eggs, so investors are glad to see the company making full use of this. Having said that, CALM’s business is cyclical and where the dividend yield is strong, the cyclicality does add that extra bit of risk and volatility.