Consumer Defensive – Ready to Face the Bear



The month on the stock market has been quite hectic but it seems that earnings are bringing back some calm to the Street.


We see that after January 20th, the market started to bounce back after good earnings’ reports. It is still unclear if we will suffer a bear market or are just going through a correction with greater volatility. On the Canadian stock market, we hit the -20% return from the TSX summit of 2015 and can technically call it a bear market. However, we don’t need much to turn around and rise back up as you can see on the previous graph. One thing is for sure; consumer defensive stocks will help you endure these fluctuations.

Consumer Sentiment & Goods Sales


In 2015, we saw retail sales rise in both the US and Canada. However, the US consumer sentiment wasn’t as straightforward as sales. This is a good example of how the Media can influence consumers to think differently. Back in July 2015, Chinese market worries started to rise. Interesting enough, consumer sentiment went down with the Chinese market… along with North American stock markets too.

Americans gained back some trust in the economy after many companies posted their earnings in October and November. By looking at a single year, you may think the consumer sentiment is still on a downtrend since it finished the year 6 points lower than it started. Let’s take a look at the bigger picture.


If you look at the past 5 years, we can see how the three metrics are heading in the same direction. Retail sales seem to stagnate in 2015, but we may as well have reached another plateau as experienced in 2014.

There are several factors leading us to think that the consumer defensive sector will perform well in 2016. A low unemployment rate in the USA along with lower gasoline prices will encourage customer to keep buying goods. While the oil industry is suffering in Canada, the overall economy is sending signs of resilience. The $10 billion infrastructure spending plan should help the Canadian economy as stated by Stephen Poloz, Bank of Canada Governor.

Report: 12 Dividend Consumer Defensive Stocks Reviewed

In order to help you out navigate in this sector, I’ve pulled out all companies showing the following criteria:

  • Dividend yield between 2% and 10%

  • 5 year dividend growth positive

  • 5 year revenue growth positive

  • 5 years EPS growth positive

I’ve created an excel spreadsheet where you can sort all stocks by the criteria of your choice. I’ve covered both the US and Canadian market. If you are looking for more, I’ve even reviewed 12 dividend consumer defensive stocks (8 US and 4 Canadian) to give more hindsight. Here’s the list of companies I reviewed:

High Liner Foods (HLF.TO) 3.25% yield

Jean Coutu Group (PJC.TO) 2.23% yield

Andrew Peller (ADW.A.TO) 1.93% yield

Lassonde Industries (LAS.A.TO) 1.02% yield

Clorox (CLX) 2.50% yield

Coca-Cola (KO) 2.31% yield

Colgate-Palmolive (CL) 2.31% yield

Pepsi Co (PEP) 2.90% yield

The Hershey (HSY) 2.65% yield

Wal-Mart (WMT) 2.92% yield

Altria (MO) 3.81% yield

Philip Morris (PM) 4.60% yield

This report has been sent to my Dividend Stocks Rock Members last week. You can register and download it too by checking my service here. Each month, I will review a sector providing valuable information on dividend growth companies. Yup… that’s another feature I’m adding to my membership service! Same price, but always more stuff to dig in!

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