Buy Income-Producing Defensive Stocks on Sale

When it comes to shopping at a store, consumers love a deal. Yet when those same consumers are shown a declining stock price, their first instinct is to avoid or sell, not buy.

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  • Investors who can look past that trend and look to buy when a stock is on sale can get a good deal. And a sale typically won’t last long on a great, industry-leading company. Taking advantage of those deals can lead to great investment returns over time.

    One deal today is General Mills (GIS). The cereal producer is down to $65 today from a high of $90 in May. The company also managed to beat earnings in an environment where it sees moderating inflation.

    General Mills has been knocked down to about 15 times earnings, a great valuation for a company with industry-leading brands.

    Action to take: Investors may like shares near current prices, as the stock has been beaten down to a 3.6 percent dividend yield. A rally from here to the prior highs could lead to gains of nearly 40 percent in the next year.

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  • For traders, shares look oversold and ready to trend higher following their latest earnings report. The January 2024 $70 calls, last trading for about $1.30, could see high double-digit gains in the months ahead.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.