7 Defensive Stocks with Strong Growth Opportunities in 2024

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Analysts have a mixed view of stocks in 2024. The forecasts center around the outlook for interest rates. If, as some analysts believe, the Federal Reserve cuts interest rates multiple times, it would be bullish for stocks.

However, if the Fed makes good on its stated intention of leaving rates higher for longer, the rally in stocks that began in late October 2023 could fizzle out.

Investors hate uncertainty, which could lead many investors to stay away from the market. That may be a mistake. Many sectors are expected to grow in 2024, including certain parts of the technology sector.

But that sector may be too volatile for some investors. For less risk-tolerant investors, 2024 is shaping up to be a good year for defensive stocks. These are stocks of companies that offer products and services that consumers will buy regardless of what's happening in the economy.

In this special presentation, we highlight seven consumer stocks offering strong growth opportunities in 2024.

#1 - Chevron (NYSE:CVX)

Chevron Corporation (NYSE: CVX) is one of the most undervalued stocks heading into 2024. That's not without reason. Crude oil prices didn't get the expected bump. In fact, heading into December 2023, crude oil was trading below $70 a barrel.

But crude oil prices are rising, which will be bullish for a company like Chevron. There are many oil stocks you can choose from. However, few have the balance sheet that Chevron brings to bear. The company can invest $22 billion per year annually from its internal cash flow, even with depressed oil prices.

The company also continues to invest in the business, and if its acquisition of Hess Corporation (NYSE: HES) is finalized in 2024, the company will increase its capital investments. All of this can be done without any concerns about its dividend which the company has increased for 36 consecutive years and has a yield of over 4%.

Chevron expects earnings to grow by 17% in 2024, and analysts are forecasting share price growth of over 23%. When you combine that with the dividend, investors get an impressive total return.

About Chevron

Chevron Corporation, through its subsidiaries, engages in the integrated energy and chemicals operations in the United States and internationally. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, production, and transportation of crude oil and natural gas; processing, liquefaction, transportation, and regasification of liquefied natural gas; transportation of crude oil through pipelines; transportation, storage, and marketing of natural gas; and carbon capture and storage, as well as a gas-to-liquids plant. Read More

Current Price: $164.45
Consensus Rating: Moderate Buy
Ratings Breakdown: 14 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $186.10 (13.2% Upside)

#2 - Hershey (NYSE:HSY)

The Hershey Company (NYSE: HSY) presents investors with a stock that sold off by around 15% in 2023. This was despite the company beating revenue and earnings on a year-over-year basis every quarter. One reason for that is concerns over declining sales due to the popularity of weight loss drugs.

So far, that narrative is not showing up in Hershey's sales and earnings. However, short interest is up about 15% in the last month, which suggests that options traders are looking for HSY stock to decline in the short term.

While Hershey's is only projecting about 4% earnings growth in 2024, the Hershey Company analyst ratings on MarketBeat give HSY stock a Hold rating but have a price target of $239.81, which is about a 27% upside from its price on January 8, 2024.

About Hershey

The Hershey Company, together with its subsidiaries, engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. The company operates through three segments: North America Confectionery, North America Salty Snacks, and International. It offers chocolate and non-chocolate confectionery products; gum and mint refreshment products, including mints, chewing gums, and bubble gums; protein bars; pantry items, such as baking ingredients, toppings, beverages, and sundae syrups; and snack items comprising spreads, bars, snack bites, mixes, popcorn, and pretzels. Read More

Current Price: $209.31
Consensus Rating: Hold
Ratings Breakdown: 4 Buy Ratings, 13 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $213.06 (1.8% Upside)

#3 - McDonald’s (NYSE:MCD)

McDonald's Corporation (NYSE: MCD) delivered about 10% growth in 2023. But that was still lower than the broader market. Certainly, concerns about weight loss drugs was one reason. Also, many investors are concerned about the company's growth.

Being a leader in a category is one thing, but innovation is another. McDonald's is responding to that, in part, with its launch of CosMc's cafes, which feature an expanded line of beverages that you can't find at a traditional McDonald's and a limited food menu.

An added benefit of owning McDonald's stock is that it gives you indirect exposure to the technology sector. McDonald's has been incorporating features such as artificial intelligence into its technology for many years.

McDonald's is projecting earnings growth of over 6% in 2024, but analysts are bidding the stock higher by 10%, and that's on top of the company's dividend, which has a yield of over 2% and one that the company has been increasing for each of the last 48 years.

About McDonald's

McDonald's Corporation operates and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, desserts, sundaes, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. Read More

Current Price: $273.37
Consensus Rating: Moderate Buy
Ratings Breakdown: 20 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $317.74 (16.2% Upside)

#4 - Monster Beverage (NASDAQ:MNST)

Not even a stock like Monster Beverage Corporation (NASDAQ: MNST) was immune to the stock market blues lost year. True, MNST stock was up approximately 15% for the year. But much of that came in the "everything rally" that started in mid-October.

But, the energy drink category is expected to have an annual growth rate of 8% through 2030. Monster continues to dominate the category not only through innovation but also due to its exclusive partnership with The Coca-Cola Company (NYSE: KO), which gives the company access to its distribution network.

Monster is projecting earnings growth of 15% in 2024. As of January 8, 2024, the Monster Beverage analyst ratings on MarketBeat give MNST stock a Moderate Buy rating with a price target of $60.77. Analysts may be placing more emphasis on a lofty 38x forward price-to-earnings (P/E) ratio than on its price-to-sales (P/S) ratio of around 9x.

Monster has been one of the best-performing stocks since it went public in the early 2000s. In fact, the stock has split five times in the last 20 years. The most recent was a 3-for-1 split in 2016.

About Monster Beverage

Monster Beverage Corporation, through its subsidiaries, engages in development, marketing, sale, and distribution of energy drink beverages and concentrates in the United States and internationally. The company operates through three segments: Monster Energy Drinks, Strategic Brands, Alcohol Brands, and Other. Read More

Current Price: $54.92
Consensus Rating: Moderate Buy
Ratings Breakdown: 13 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $61.32 (11.6% Upside)

#5 - Union Pacific (NYSE:UNP)

Union Pacific Corporation (NYSE: UNP) presents investors with a heads you win, tails you still win scenario. Shares of the railroad giant were up nearly 15% in 2023 despite expectations for weakening freight demand and lower energy prices that meant lower fuel surcharges.

2024 will undoubtedly have its share of surprises, but most analysts believe the Fed will lower interest rates at least a few times in 2024. That will spur demand and cause oil prices to rise. Both of those events will be bullish for Union Pacific. Perhaps in expectation of that, Union Pacific forecasts earnings to be up over 10% in 2024. That growth is not necessarily reflected in the UNP stock price.

And even if the economy continues to tread water or gets weaker, investors that take a position now can collect a dividend that has been growing at an annual growth rate of over 10% the last three years, has a yield of 2.18%, and an annual payout per share of $5.20.

About Union Pacific

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. Read More

Current Price: $246.40
Consensus Rating: Moderate Buy
Ratings Breakdown: 14 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $259.61 (5.4% Upside)

#6 - Newmont Corporation (NYSE:NEM)

Gold is a polarizing asset class for many investors. But there are times when there's no denying its investment value. 2024 is setting up to be one of those times. Central banks all over the world have been actively buying gold. The U.S. government is running an unprecedented deficit that continues to devalue the U.S. dollar. And geopolitical tensions are causing many investors to focus on preserving the value of their hard-earned wealth. All of those are bullish arguments for owning gold.

One way to invest in gold without holding the physical metal is to buy shares of one or more mining stocks. And one of the best for you to consider in 2024 is Newmont Corporation (NYSE: NEM).

Shares of NEM stock fell more than 20% in 2023 but have started to climb along with other gold-related investments in 2024. The company is projecting earnings growth of over 44% in 2024, and the Newmont Corporation analyst rating on MarketBeat gives the stock price a 39% upside from its January 8, 2024 level. And like many mining stocks, you get a dividend that, in the case of Newmont Corporation, pays a dividend with a 4% yield.

About Newmont

Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. Read More

Current Price: $42.25
Consensus Rating: Moderate Buy
Ratings Breakdown: 7 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $48.35 (14.4% Upside)

#7 - Zoetis (NYSE:ZTS)

Healthcare stocks, and particularly pharmaceutical stocks, are often considered strong defensive stocks to own. Consumers will cut back on many things, but prescriptions are a must-have, not a nice-to-have.

That dynamic extends to the health of our pets. Spending on pet health continues to grow. Zoetis Inc. (NYSE: ZTS) develops and brings to market animal health medicines, vaccines, and diagnostic products.

Through the first three quarters of 2023, Zoetis is reporting consistent revenue and earnings growth despite difficult comparisons to 2021 and 2022, when many families added a furry friend or two to their homes. The company is projecting earnings growth of over 10% in 2024.

While the company's dividend has an uninspiring 0.77% yield, it has been growing the dividend at an annual rate of over 23% in the last three years while increasing the dividend for the last 12 consecutive years.

Investors are paying a premium for ZTS stock, which trades at a forward P/E of 36x. However, it has a more attractive P/S ratio of just over 11x.

About Zoetis

Zoetis Inc engages in the discovery, development, manufacture, and commercialization of animal health medicines, vaccines, and diagnostic products and services in the United States and internationally. The company commercializes products primarily across species, including livestock, such as cattle, swine, poultry, fish, and sheep and others; and companion animals comprising dogs, cats, and horses. Read More

Current Price: $168.66
Consensus Rating: Buy
Ratings Breakdown: 7 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $211.75 (25.5% Upside)

Investing can seem intimidating, especially when you see the share price of many "quality" companies dropping by 5% or more. But the mistake many long-term investors make is thinking like a trader. Over the long haul, buying shares of quality companies such as the ones listed here will deliver solid returns over time.

That's particularly true of defensive stocks. Companies that make products that every consumer or business needs will always have a solid upside. And with many of these, you get a reliable dividend, which gives you a steady source of income regardless of the direction of the stock.

Wherever you are on your investment journey, MarketBeat is here to help. A subscription to MarketBeat All-Access covers the cost of all our premium research. Plus, you can add an unlimited number of watchlists and stocks, all with real-time alerts, so you can always stay on top of news that affects your stocks of interest.