3 Defensive Stocks To Watch: PZZA, DPZ, PM

How do you recession-proof your portfolio? Defensive stocks are one strategy – shares in companies whose business remains profitable in a recession. The use of such defensive stocks has been a matter of long-running debate, with proponents claiming that they are a hedge against losses, while detractors demonstrate that defensive stocks really just lose a bit less when the markets turn down.

Papa John’s International, Inc.

Start with the pizza. Just a flat dough, some sauce, and some cheese, and yet everyone loves it. A delicious pizza is a thing of glory all unto itself, but that famous pie can even support some unexpectedly strong stock buys.

Papa John’s (PZZA – Research Report) has been in the pizza business since 1984 and has a history of clever innovations. In 1985, it was the first pizza chain to introduce dipping sauce for pizza slices – a gimmick that quickly became very popular. In 2002, it made another first by offering online ordering, something we now all take for granted. The company currently has 5199 locations, mostly franchises but including approximately 250 ‘company owned’ outlets.

All of this gives PZZA a deep foundation, with Stephen’s Will Slabaugh (Track Record & Ratings), writing “the long-term earnings power of Papa John’s current store base … is being undervalued.” Longbow Research’s Alton Stump (Track Record & Ratings) adds that “a sales recovery is now underway at Papa John’s and should continue in coming quarters.” His price target on this stock is $61.

See PZZA Price Target and Analyst Ratings Detail.

Domino’s Pizza, Inc.

Domino’s (DPZ – Research Report) was founded in 1960 and is now the world’s largest pizza chain, reckoned by sales volume. The company started as a small business in Ypsilanti, Michigan, catering to the students at nearby Eastern Michigan University.