As the Federal Reserve prepares to lower interest rates, investors need to be strategic in finding opportunities that will thrive in a changing economic landscape. One such avenue to explore is dividend stocks, particularly in defensive industries.
1. Hormel Foods Corp (NYSE: HRL)
Hormel Foods is a dividend king with a track record of 59 consecutive years of dividend increases and a current yield of 3.84%. While the stock has seen negative returns in the past five years due to inflationary pressures on poultry and pork prices, the company may be poised for a turnaround.
Lower interest rates can benefit Hormel as consumer behaviors shift towards more home-cooked meals. Additionally, an upgrade from Citigroup and a potential strong earnings report could signal a positive trend for HRL stock.
2. Enbridge (NYSE: ENB)
Enbridge is a midstream energy company with a vast network of pipelines in North America and a dividend yield of 6.64%. Despite modest gains in 2024, Enbridge remains a solid bet in the energy sector, especially with a potential interest rate cut boosting oil prices and demand.
Investing in Enbridge is a strategic move that aligns with the most likely outcome in the current market conditions.
3. The Hershey Company (NYSE: HSY)
Hershey offers investors a safe dividend with a 15-year track record of increases and a yield of 2.84%. While the stock has faced challenges in recent years, including elevated cocoa prices and competition from weight loss drugs, Hershey’s market share and brand power remain strong.
With a potential turnaround in the stock price and a favorable upcoming season for the company, investors may find a sweet spot in Hershey stock.
By strategically investing in these dividend stocks in defensive industries, investors can position themselves for growth and stability in a changing economic environment. It’s crucial to monitor market trends and company performance to make informed decisions that align with long-term financial goals.