Current market conditions have investors looking for defensive stocks, and Jim Cramer has ideas for good individual ones to buy, even as he is still a seller of the overall market.
Consumer-products maker Colgate-Palmolive (CL) is the Action Alerts PLUS charitable trust’s newly initiated defensive stock. And AAP Portfolio Manager Cramer and AAP Senior Analyst Jeff Marks explained the pick to viewers of the trust’s monthly members call.
“It’s their toothpaste and most specifically hands soap because everyone is washing their hands more frequently and there they need to go out to the store and buy more of that,” Marks said.
“And I think that's huge in this type of market. And they have 57 straight years of increasing it's annualized dividend payout.”
Colgate recently raised its dividend, and despite a recent pullback in the stock, the shares have performed nicely. Marks referred to Colgate as a “high-quality problem” for the charitable trust.
It is a nice turnaround for the company, which had been spinning its wheels for multiple quarters.“They simply weren’t taking share and weren’t expanding on their emerging markets,” Cramer said.
Cramer also notes that Colgate’s valuation is still at a discount compared with peers when measured by price-to-future-earnings. “It is [undervalued] relative to its peers considering its growth acceleration,” Cramer said.
Check out the video above for more of the conversation and join Action Alerts PLUS to get all of Cramer’s exclusive takes on the market. You won’t find them anywhere else.
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