Consumer defensive stocks tend to perform well in uncertain times because they sell essential items such as household products, healthcare items, and food and beverages, among others. Such companies also tend to have a strong pricing power which helps them to easily pass on increasing costs to consumers.
The US market continues to struggle due to concerns over tariffs, geopolitical issues, and politics. In such times, consumer defensive stocks offer a way to protect one’s portfolio from this uncertainty.
When such shares also offer a high dividend yield, it performs a killer combination, loved by defensive investors looking to park their money for reliable passive income. We therefore decided to come up with a list of the top 10 high-dividend-yielding consumer defensive stocks.
To come up with the list of top 10 high-dividend consumer defensive stocks, we only considered stocks from the consumer defensive sector with a market cap of at least $10 billion and a dividend yield of at least 4%.
A close-up of an array of tobacco products, emphasizing the selection and consumer choice.
10. Hormel Foods Corporation (NYSE:HRL)
Hormel Foods makes and sells various food products, including nuts and meats. The end market of the company mainly consists of commercial customers, including food service operators and convenience stores. The stock’s dividend yield is currently hovering around the 4% mark, which is well above the 5-year average of 2.4%.
The stock is also undervalued when one looks at the price-to-book ratio, which currently stands at 2 against a 5-year average of 3.03. In the context of the 2025 guidance that the company announced last month, this price level looks quite attractive.
At the earnings call last month, the company’s management reaffirmed the 2025 guidance despite increasing concerns about inflation and tariffs. It expects about $100 million to $150 million in incremental profits during the fiscal year from the transform and modernize initiative, aimed at improving the supply chain and its product portfolio.
The investment opportunity has arisen because the Q2 performance is expected to be the same as Q1. It is in the second half of the year that the value-added turkey and Planters product line recovery will both act as a tailwind, driving the expected growth for the year.
9. Target Corporation (NYSE:TGT)
Target Corporation is a general merchandise retailer that provides shoes, apparel, accessories, beauty products, and jewelry. The company also offers food and beverage products, electronics, dry and perishable groceries, and luggage. Apart from being a dividend king (50 consecutive years of dividend growth), it offers a healthy dividend yield of 4.31%.
TGT has a track record of increasing its dividend yield for the past 56 years. Its dividend grew at an annualized growth rate of 11.23% over the past 5 years. The company announced its fiscal 2024 financial results last month, reporting a solid performance despite tariff-related concerns. Net sales were slightly lower than the previous year but were in line with estimates.
The decline in sales was partly because fiscal 2023 gained an additional week’s advantage. Investors will be glad to know that the company is constantly improving its gross margins, so the minor reduction in topline isn’t a big deal.
Target Corporation is among the top 10 most oversold stocks within the S&P 500 as per its RSI. This is due to the significant decline in the share price in 2025, as the price fell 23% this year. The dip is a great opportunity for income investors looking at reliable dividend income from a solid business.
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