With inflation gauges cooling and growth data looking shaky, investors are being pulled between fear of weaker earnings and the hope that the Fed stays on hold. That tug of war has pushed steady dividend payers back into focus for anyone who wants income and fewer surprises. This article looks at 3 US dividend-focused defensive stocks exposed to the latest data, and why each one might deserve a closer look now.
The stocks covered below are just a starting sample, and the full screen surfaced 7 more US dividend-focused defensive companies with equally compelling stories that are not featured in this article. To identify and analyze the ideas that best fit your income and risk profile, head straight to the US Dividend-Focused Defensive Stocks screener.
Marzetti (MZTI)
Overview: Marzetti is a US food company that makes and markets branded specialty products such as New York Bakery frozen garlic bread, Sister Schubert’s rolls, Marzetti salad dressings and dips, and licensed items like Olive Garden and Chick-fil-A sauces for both grocery shelves and restaurant kitchens.
Operations: Marzetti generates about US$1 billion of revenue from Retail products and about US$940 million from Foodservice, with virtually all of its roughly US$1.9b in sales coming from the United States.
Market Cap: US$3.2b
Marzetti sits in the heart of the consumer staples space, selling dressings, sauces and frozen bread that tend to stay in household baskets even when growth slows and rates stay restrictive. The stock offers a 3.45% dividend yield and high-quality earnings, while analysts still see upside to the current share price despite a recent 35.1% decline over six months and relatively modest forecast growth. Recent index additions to several Russell value and defensive benchmarks, as well as a new Chief Supply Chain Officer with deep CPG experience, add interest for investors watching execution on margin and productivity. At the same time, sluggish long term revenue growth, private-label competition and input cost swings mean this is not a set-and-forget dividend story.
Marzetti’s recent share price slide and steady US$1.9b revenue base could be masking a more interesting balance between resilience and pressure on margins. Review the Marzetti financial health report to see what the balance sheet might be hinting at next.
Build your own resilient dividend shortlist
Marzetti and the other two stocks here all surfaced from a single Simply Wall St screen, but the real edge comes from tailoring the filters to what matters most to you. Use our flexible Screener to combine metrics like dividends, valuation, quality and balance sheet strength, or jump straight into our curated Investing Ideas for ready-made starting points.
Ingredion (INGR)
Overview: Ingredion is a global ingredients company that turns corn and other starch-based crops into sweeteners, starches, nutrition ingredients and biomaterials used in everyday products from packaged food and drinks to paper, textiles, personal care and industrial materials.
Operations: Ingredion generates most of its revenue from Texture & Healthful Solutions at about US$2.5b, Food & Industrial Ingredients LATAM at about US$2.4b and Food & Industrial Ingredients U.S./Canada at about US$2.1b, with around US$500 million from other activities and an intersegment offset of roughly US$246 million.
Market Cap: US$6.6b
Ingredion gives you exposure to everyday food demand through starches and sweeteners, while its Texture & Healthful Solutions business leans into trends like clean labels, sugar reduction and higher value specialty ingredients. The stock combines a 3.12% dividend with a P/E that sits well below many US food peers, and Simply Wall St’s DCF suggests the current price is far under an estimate of intrinsic value. At the same time, softer volumes, pressure on legacy products such as industrial starches and high fructose corn syrup, and execution risk around the pending Tate & Lyle deal and acquisition financing mean the story is not without headaches. If you want a defensive income stock that could benefit from moderating inflation but still depends on careful capital allocation, Ingredion is worth keeping on your watchlist.
Ingredion’s P/E discount and income profile may be obscuring a much broader story about capital allocation and the Tate & Lyle transaction. Get the full context in the analysis report for Ingredion
Brown-Forman (BF.B)
Overview: Brown-Forman is a US-based spirits company behind brands such as Jack Daniel’s, Woodford Reserve and Herradura, producing and selling whiskey, tequila, gin and ready-to-drink cocktails to consumers worldwide through a mix of distributors and direct relationships with retailers and governments.
Operations: Brown-Forman generates about US$3.9b of revenue from Beverage Alcohol Consumer Products, with around US$1.9b from the United States and the rest spread across markets including Germany, Australia, the United Kingdom, Mexico and other international regions.
Market Cap: US$12.9b
Brown-Forman offers a mix of resilience and debate that fits the US Dividend-Focused Defensive Stocks theme. It provides a 3.25% dividend from a global portfolio of spirits brands that, according to the article, often hold up relatively well when growth cools. Earnings momentum has softened and revenue is expected in the article to grow more slowly than the broader US market. The stock trades below one estimate of fair value and below many peers on P/E, even after rejecting a US$15b takeover proposal and reaffirming its stand-alone plan backed by the founding family. That combination of steady cash generation, a debt-funded balance sheet and questions around consumer demand trends presents a nuanced story that dividend-focused investors may wish to review in more detail.
Brown-Forman’s rejected US$15b bid and lower P/E hint that the market may be underpricing its dividend and global brands. See how the 3 key rewards and 1 important warning sign could change the risk story completely
Seeking Fresh Alternatives Beyond Dividends
Some of the most interesting ideas often move first. Before the next breakout gathers momentum and the data goes stale under the radar for now, act now.
- Chase durable income from companies built to withstand shocks by filtering for a curated 10 dividend fortresses that put cash returns and balance sheet strength front and center.
- Spot potential growth stories early by tracking 18 high quality undiscovered gems that still fly below most screens yet already pair solid fundamentals with room for investor attention to catch up.
- Position ahead of rising demand for secure infrastructure by scanning 38 power grid technology and infrastructure stocks that could benefit if grid reliability, automation and electrification stay in focus.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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