We recently published a list of 10 Defensive Dividend Stocks To Buy During Market Sell Off. In this article, we are going to take a look at where General Mills, Inc. (NYSE:GIS) stands against other defensive dividend stocks to buy during market sell off.
The importance of defensive dividend stocks only becomes clear when the broader market is taking a hit. The S&P is down nearly 8% in a month while Nasdaq has lost over 11.41%. Investors are wondering how to protect themselves from volatility and the answer lies in defensive stocks.
Here is a key distinction investors must understand. Growth stocks rely on price appreciation to generate shareholder returns, something that is hard to achieve when the broader market is facing a severe sell-off. Dividend stocks, on the other hand, became more attractive. They not only help reduce the volatility but as their price goes down, their yield becomes more attractive.
We therefore decided to identify the best stocks for such a scenario. To come up with the list of 10 defensive dividend stocks to buy during a market sell-off, we only considered stocks belonging to the Consumer Defensive sector with a market cap of at least $2 billion and a dividend yield of at least 3%.
A worker in a production facility packaging arbitrary food products, reflecting the company’s commitment to comprehensive production standards.
General Mills, Inc. (NYSE:GIS)
General Mills, Inc. (NYSE:GIS) manufactures and sells consumer foods across the globe. Some of its brands include Cocoa Puffs, Betty Crocker, Chex, Cheerios, Trix, and many more. The company’s stock offers a healthy 4.03% dividend yield.
General Mills (NYSE:GIS) stock has a healthy dividend yield partly because its stock hasn’t gone anywhere in the last year and a half, with disappointing growth rates. This is what makes the stock’s yield and valuation so attractive, with it trading at a PE ratio of just 13.53. 2025 isn’t going to be a blockbuster year either, but looking at what comes after that is where the opportunity lies.
For starters, the strengthening euro is likely to help the company boost its profits. If inflation rises, General Mills (NYSE:GIS) will have more room to increase prices and profitability, though it might take a few quarters for that to translate to the bottom line.
The firm is also restructuring its yogurt business and has a renewed focus on its pet segment. This could help with the turnaround and 4% is a very attractive yield to have while one waits for it.
Overall, GIS ranks 5th on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of GIS 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 GIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
