10 Defensive Dividend Stocks To Buy During Market Sell Off

1. The Kraft Heinz Company (NASDAQ:KHC)

The Kraft Heinz Company manufactures and sells beverages and food products globally. The company is well known for its sauces and condiments, especially the globally known ‘Heinz Ketchup’. The company’s stock has an attractive dividend yield of 5.29%.

KHC is one of those stocks that enjoys the backing of Warren Buffet’s Berkshire Hathaway. However, it has disappointed investors for years, trading sideways for about 5 years now. However, with the broader market trading at record valuations, a 5.29% yield is better than putting your money in the bank.

But that’s not why investors should buy this stock. The business is improving and here’s how. During the last 5 years, the company has continuously paid down its debt, reducing it by one-third approximately. The negative effects of the debt are further reduced by an improved operating cash flow. The cash flow to debt ratio has increased from 0.1 to 0.2 in 5 years, showcasing how the company has reduced its debt risk.

At a 16.2% cash flow to sales ratio, investing for the turnaround is worth it. Any little price appreciation will add significantly to the already strong dividend yield.

KHC is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 43  hedge fund portfolios held KHC at the end of the fourth quarter, which was 38 in the previous quarter. While we acknowledge the potential of KHC as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as KHC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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