Three defensive stocks for your portfolio during market shocks

In May, investors were "on nails," proving as an exception to the statistics that "Sell in May and go away" works, but under certain conditions. However, given the resumption of optimism since the beginning of June, this statistic remains again in the background. Even so, however, investors have had one in mind about the defensive sectors and bonds.

Major indexes are trading again close to their historic peaks, but many investors remain cautious. Everyday media space is drawing, speculating, on the brink of the propagandist, the coming of a recession, the risk factors accompany the markets constantly. No wonder the market participants are looking for cheap stocks of companies whose results can be predicted more easily, have a good dividend and stable performance.

The Utilities sector has proven to be the most suitable for many investors. The reality is that investors targeting dividends migrate to Utilities. A process that has lasted for 10 years, which seems to be the only place where your money "will be safe". With a yield curve almost flat or reversed, these stocks offer the most attractive dividend and protection.

There are currently 28 Utilities in the S & P500, but only three meet the hedging criterion if you want to call it.

• Shares that are 10% above the initial potential target of the analysts
• Dividend rate higher than yield percentages of 10 and 30-year bonds
• Report estimates are at least 20 times higher than expected

These three companies have also existed for more than 100 years. Of the 28 companies, only half are currently traded over analysts' targets, including American Electric Power, American Water Works, ConEd, NextEra Energy, Southern Company, Sempra and Xcel.

Until June 13, 2019, yields on 10-year bonds were 2.12%, and at the 30-year-old 2.61%.

CenterPoint Energy is a utility, a gas company with a market capitalization of $ 14.7 billion. Currently about $ 29 is traded. Analyst Target was $ 31.88 and dividend was 3.9%. The 52-week range is $ 25.65 to $ 31.42. The company was rated 16 times above initial expectations.

Edison International is an electric utility company with a market capitalization of $ 19 billion. Target is $ 71.18, and is currently traded at about $ 59.79 per share. The dividend is 4.1%. It is estimated at 13 times the expectations.

ONEOK is also a gas utility company with a market share of $ 27 billion. It trades around $ 65.06 per share, with the consensus for $ 71.74. The dividend is% 5.3. The 52-week range ranges from $ 50.26 to $ 71.99 and the company is estimated at 17.5 times.

Sometimes stock ratings and bond yields create an interesting moment for value-seekers and those looking for security rather than being aggressive. The fact that long-term government securities are close to historic bottom, and the Fed's intention not to raise interest rates, creates bad conditions for aggressive investors, and is becoming more and more difficult to catch up.

Photo: Flickr

Read more:

• Asian markets returned some of the losses but ended in the red
• European markets continue with the losing streak, safe heaven assets are rising
• Protect your portfolio with these defensive stocks
• Forex Today: 2020 kicks off with the dollar recovering amid Chinese RRR cut, trade optimism
• We look forward to a positive start to the first European session for 2020