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Strengthen Portfolio Defense With These Buy Rated Stocks: PPC, PM, OLLI

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Stocks in the Zacks Consumer Staples sector carry a defensive nature, as these companies’ products have an advantageous ability to generate consistent demand in the face of many economic situations.

Three top-ranked stocks from the sector – Ollie’s Bargain Outlet (OLLI - Free Report) , Philip Morris (PM - Free Report) , and Pilgrim’s Pride (PPC - Free Report) – could all be considerations for investors looking to heighten their portfolio’s defense.

Let’s take a closer look at each one.

Ollie’s Boosts Sales Outlook

Ollie’s Bargain Outlet, a current Zacks Rank #2 (Buy), is a unique, fast-growing, extreme-value discount retailer of brand-name merchandise. The revisions trend for its current fiscal year has remained bullish, with the $3.28 Zacks Consensus EPS estimate suggesting 12% year-over-year growth.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s Q2 earnings release brought about selling pressure but the results were overall strong, likely a reflection of some profit-taking after a strong run. Concerning the highlights in the print, OLLI’s comparable store sales saw 5.8% growth year-over-year alongside a 30-basis point increase to its operating margin.

The company raised its current-year sales and earnings outlook following the print. Below is a chart illustrating OLLI’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

PM Keeps Paying Investors

Philip Morris International is a leading international tobacco company working to deliver a smoke-free future, evolving its portfolio for the long term to include products outside of the tobacco and nicotine sector.

The stock sports a favorable Zacks Rank #2 (Buy), with earnings expectations increasing across the board over recent months.

Zacks Investment Research
Image Source: Zacks Investment Research

Philip Morris rewards its shareholders handsomely, with its annual dividend presently yielding a sizable 4.1% annually. Dividend growth is also apparent, with PM carrying a respectable 2.6% five-year annualized dividend growth rate.

Please note that the chart below is on a trailing twelve-month basis.

Zacks Investment Research
Image Source: Zacks Investment Research

PPC Sees Robust Growth Expectations

Pilgrim's Pride, a current Zacks Rank #2 (Buy), is one of the largest chicken companies in the US, Mexico, and Puerto Rico. The earnings estimate revisions trend has been red-hot for its current fiscal year, up more than 120% over the last year and suggesting 180% growth year-over-year.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares aren’t expensive given the forecasted growth, with the current 9.5X forward 12-month earnings multiple beneath the 11.3X five-year median and five-year highs of 18.8X. The current PEG ratio works out to 0.2X, reflecting that investors are paying a fair price for the forecasted growth.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares have been scorching hot in 2024, gaining 63% and widely outperforming relative to the S&P 500. Better-than-expected quarterly results that have led to positive earnings estimate revisions have driven the move. 

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

Consumer Staples stocks can heighten a portfolio’s defense, as these companies’ products generate reliable and consistent demand in the face of many economic situations.

In addition, many of these stocks pay dividends, undoubtedly a significant boost to portfolios.  

For those looking to shield themselves against volatility, all three stocks above – Ollie’s Bargain Outlet (OLLI - Free Report) , Philip Morris (PM - Free Report) , and Pilgrim’s Pride (PPC - Free Report) – could be of interest.

All three have seen their near-term earnings outlooks improve as of late, a major positive.

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