In this article, we will look at the 5 best defensive stocks under $50. If you want to explore similar stocks that can help hedge against inflation and come relatively cheap, you can also read about the 10 Best Defensive Stocks Under $50.
5. Albertsons Companies, Inc. (NYSE:ACI)
Number of Hedge Fund Holders: 37
Share Price as of August 23: $28.17
Albertsons Companies, Inc. (NYSE:ACI) engages in the operation of food and drug stores in the United States. The company’s food and drug retail stores offer grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services. As of August 23, the stock is trading at a P/E ratio of 10.21x and offers a forward dividend yield of 1.68%, which the company supports with free cash flows of $1.73 billion.
On July 26, Albertsons Companies, Inc. (NYSE:ACI) released its earnings report for the company’s fiscal first quarter of 2022. The company reported earnings per share of $0.84 and generated revenue of $23.31 billion, the latter up 9.60% year-over-year and ahead of the Wall Street consensus by $545.21 million. Albertsons Companies, Inc. (NYSE:ACI) also raised its full-year 2022 adjusted EPS view to a range between $2.80 and $2.95, up from its prior EPS view of a range between $2.70 and $2.85.
On July 28, Citi analyst Paul Lejuez revised his price target on Albertsons Companies, Inc. (NYSE:ACI) to $30 from $36 and reiterated a ‘Neutral’ rating on the shares. The analyst noted that the stock’s risk/reward ratio is balanced.
At the end of Q2 2022, 37 hedge funds held stakes in Albertsons Companies, Inc. (NYSE:ACI) worth $4.71 billion, compared to 39 positions in the preceding quarter with stakes worth $5.66 billion. As of June 30, Cerberus Capital Management owns nearly 152 million shares of Albertsons Companies, Inc. (NYSE:ACI) and is the top shareholder in the company. The investment covers 79.96% of Cerberus Capital Management’s 13F portfolio.
4. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 40
Share Price as of August 23: $37.42
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) operates as a pharmacy-led health and beauty retail company. The company sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores. On July 5, RBC Capital analyst Ben Hendrix revised his price target on Walgreens Boots Alliance, Inc. (NASDAQ:WBA) to $42 from $46 and reiterated a ‘Sector Perform’ rating on the shares.
On July 13, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) declared a quarterly cash dividend of $0.48 per share, up 0.5% from its prior dividend of $0.48 per share. The dividend is payable on September 9, to investors of record at the close of business on August 19. As of August 23, the stock is trading at a P/E ratio of 6.34x and has a forward dividend yield of 5.15%, which the company backs with free cash flows of $3.43 billion.
At the close of Q2 2022, 40 hedge funds were long Walgreens Boots Alliance, Inc. (NASDAQ:WBA) with stakes worth $599 million. This is compared to 38 positions in the preceding quarter with stakes worth $737 million. In the second quarter of 2022, Camber Capital Management raised its stake in Walgreens Boots Alliance, Inc. (NASDAQ:WBA) by 18% to over 2.82 million shares, making it the most prominent shareholder in the company.
3. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 41
Share Price as of August 23: $38.76
On July 21, The Kraft Heinz Company (NASDAQ:KHC) reported fiscal Q2 earnings per share of $0.70 to beat estimates by $0.02. The company’s revenue for the quarter came in at $6.55 billion, ahead of the Wall Street consensus by $191 million. Shares of The Kraft Heinz Company (NASDAQ:KHC) have soared by 7.33% year-to-date, as of August 23.
On July 27, The Kraft Heinz Company (NASDAQ:KHC) declared a quarterly cash dividend of $0.40 per share. The dividend is payable on September 23 to shareholders of record at the close of business on August 26. As of August 23, the stock offers a forward dividend yield of 4.15%, which the company supports with $3.2 billion in free cash flows.
On July 28, Stifel analyst Christopher Growe upgraded The Kraft Heinz Company (NASDAQ:KHC) to ‘Buy’ from ‘Hold’ and reiterated his price target of $43. The analyst likes the company’s solid and improving operations and sees continued international growth driving further upside for the stock.
Hedge fund sentiment towards KHC was positive in Q2. At the close of the quarter, 41 hedge funds were long The Kraft Heinz Company (NASDAQ:KHC) with stakes worth $13.6 billion. This is compared to 35 positions in the previous quarter with stakes worth $13.4 billion. As of June 30, Berkshire Hathaway owns roughly 325 million shares of The Kraft Heinz Company (NASDAQ:KHC) and is the largest shareholder in the company. The investment covers 4.13% of Warren Buffett’s 13F portfolio.
2. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 48
Share Price as of August 23: $45.25
On July 25, Jefferies analyst Owen Bennett revised his price target on Altria Group, Inc. (NYSE:MO) to $54 from $58 and reiterated a ‘Buy’ rating on the shares. The analyst sees the stock’s dividend yield rising to 10% and above by 2028. As of August 23, Altria Group, Inc. (NYSE:MO) shares offer a forward dividend yield of 7.93% and the company has free cash flows of $8.08 billion to support its dividend payments. The company has been growing its dividends consistently for over 50 years and has a 5-year dividend CAGR of 8.09% with an annual payout ratio of 76.76%.
On July 28, Altria Group, Inc. (NYSE:MO) reported fiscal second quarter earnings per share of $1.26, beating estimates by $0.01. The company’s revenue for the quarter amounted to $5.37 billion. The company also reaffirmed its guidance and said that it expects to deliver full-year adjusted diluted EPS of between $4.79 and $4.93, with the Wall Street consensus at $4.83.
At the end of Q2 2022, 48 hedge funds held stakes in Altria Group, Inc. (NYSE:MO) worth $1.83 billion. This is compared to 47 positions in the previous quarter with stakes worth $1.95 billion. Arrowstreet Capital raised its stake in Altria Group, Inc. (NYSE:MO) by 507% in Q2, with the value of its position standing at $370 million at the end of June. The investment covers 0.52% of Arrowstreet Capital’s 13F portfolio.
1. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 49
Share Price as of August 23: $49.53
On June 23, The Kroger Co. (NYSE:KR) declared a quarterly cash dividend of $0.26 per share, up 23.8% from its prior dividend of $0.21. The dividend is payable on September 1 to investors of record at the close of business on August 15. The company has been growing its dividends for the past 15 years and has a 5-year dividend growth rate of 12.91%. As of August 23, The Kroger Co. (NYSE:KR) shares have gained 9.83% year-to-date and offer a forward dividend yield of 2.08%, which the company supports with free cash flows of $2.49 billion.
Wall Street is bullish on The Kroger Co. (NYSE:KR). On June 17, Deutsche Bank analyst Krisztina Katai raised her price target on The Kroger Co. (NYSE:KR) to $53 from $50 and reiterated a ‘Hold’ rating on the shares. On June 21, MKM Partners analyst Bill Kirk raised his price target on The Kroger Co. (NYSE:KR) to $55 from $48 and reiterated a ‘Neutral’ rating on the shares.
At the close of Q2 2022, 49 hedge funds were bullish on The Kroger Co. (NYSE:KR), holding KR stakes worth $4.30 billion. This is compared to 45 positions in the preceding quarter with stakes worth $5.16 billion. As of June 30, Berkshire Hathaway owns 52.4 million shares of The Kroger Co. (NYSE:KR) and is the top shareholder in the company. The investment covers 0.82% of Warren Buffett’s 13F portfolio.
You can also take a look at 6 Defensive Stocks to Buy in 2022 According to Seth Klarman and 10 Defensive Stocks in Billionaire Ray Dalio’s Latest Portfolio.
