Unfortunately for investors, even when fundamentals look reasonably good for the economy, world headline events can make the sellers rush to the desk to dispose of stocks. As China continues to melt down, the word of North Korea testing a hydrogen bomb spread and the Iran/Saudi Arabia tension seemed to be stoked higher, there was one set of stocks that held in reasonably well, and they were all in very defensive sectors. In addition to Treasury bonds and gold, when international tensions escalate, investors often rush to three defensive sectors: telecom, utilities and consumer staples. All of these have products and services that will continue to be used regardless of how dark any situation starts to look.
We screened the Merrill Lynch research universe for stocks rated Buy in those three sectors, and found four that make good sense for nervous investors now: Dominion Resources Inc. (NYSE: D) is one of the nation’s largest producers and transporters of energy, with a portfolio of approximately 24,600 megawatts of generation and 6,455 miles of electric transmission lines. Kraft Heinz Co. (NYSE: KHC) is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world, with eight $1 billion plus brands. PG&E Corp. (NYSE: PCG) is one of the largest combined natural gas and electric utilities in the United States. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world.
Source: Wall St. 24/7
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