‘Defensive’ Stocks Are Getting Crushed in a Falling Market. Why It’s Time to Buy.

The stock market has dropped recently, and so have so-called defensive stocks. That unusual move makes the group look more like a buying opportunity.

Defensive stocks—those producing goods and services people will buy regardless of the health of the economy—usually rise in that kind of environment. But that hasn’t been the case recently. It isn’t concern about earnings that is hurting stocks: The attractiveness of these companies’ dividends has been the problem as yields on Treasury bonds have increased. The yield on 10-year Treasury debt is up to around 4.4% from a bit under 4% over the summer. Forward dividend yields on staples stocks are about 3%, while utilities yield just under 4%.Still, the selling is likely to moderate soon.

The staples fund trades at about 19.1 times earnings, a roughly 5% premium to the market, but it can trade at a more than 20% premium when those stocks are in favor.

Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen

Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.

The bullish case for U.S. stocks is getting weakerNew Highs vs. New Lows indicator has generated a sell signal.
Herkunft: MarketWatch - 🏆 3. / 97 Weiterlesen »

Japanese stocks fall for third day as Hong Kong stocks dropStocks in the Asia-Pacific region mostly tumbled Thursday, Sept. 21, with shares in Hong Kong declining for the second day and the Japanese market showing a...
Herkunft: MarketWatch - 🏆 3. / 97 Weiterlesen »

Japanese stocks fall for fourth session as Hong Kong stocks gainAsia-Pacific stocks mostly increased Friday, Sept. 22, the Japanese market showing a fourth day of decreases. Hong Kong's Hang Seng Index gained 2.3% to...
Herkunft: MarketWatch - 🏆 3. / 97 Weiterlesen »