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 Kenvue Inc. (NYSE:KVUE) 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 pharmacist at a local store, stocking shelves with products from the consumer health company.
Kenvue Inc. (NYSE:KVUE)
Kenvue Inc. (NYSE:KVUE) is a consumer health company that operates through Skin Health, Self Care, and Beauty & Essential Health segments. The company’s stock offers a 3.59% dividend yield.
Kenvue (NYSE:KVUE) has been a disappointment for IPO investors as the stock has continuously underperformed with guidance cuts in the last two years. 2025 isn’t projected to be great either. This means the stock trades at a discount to its peers and if you can trust the management to turn things around, KVUE is a great bet with solid dividend support.
The maker of Band-Aid and Tylenol has already improved its management and marketing efforts which is what’s driving the modest growth in 2025. However, things could take off by next year, especially in the context of Starboard: the activist investor that realized the value of the business and has called for a shake-up.
Earlier in the week, Starboard successfully negotiated a seat on the company’s board. Here’s why they want things to change:
Despite the company’s promising future prospects, Kenvue (NYSE:KVUE) has suffered from persistent disappointing and deteriorating financial results, missed commitments, and ineffective board oversight, resulting in stock price underperformance and a significant valuation discount compared to peers.
Now that the company has finally signed an agreement with the activist investor, there is a good chance it can focus on the business again, with the added benefit of a new mission thanks to the fresh board members.
Overall, KVUE ranks 10th on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of KVUE 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 KVUE 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.
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