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Foods stabilize your Portfolio?

Food is a great sector for investors because of the dependency to customers. People have to eat and drink for surviving no matter what the economy is doing. But could stocks from the food sector stabilize our portfolio during financial turmoil’s?

If we regard the Beta of some companies acting within the food branch, we see that the average Beta is 0.48. This means, that an average stock correlated with the financial market in an amount of roughly a half. If financial markets fall 1 percent, food stocks fall a half percent and vice versa.

Here is a financial table about figures from the food branch sorted by revenues:

Especially for risk averse investors or leveraged portfolios, it could be interesting to buy food stocks in order to stabilize returns and to reduce volatility. The price an investor pays for this more security is a lower portfolio growth and at least a lower return.

Selected Articles:

· Colgate-Palmolive: Dividend Stock of the Month August 2010
· Kraft Foods: HY-Figures better as expected?
· Procter Gamble – Consumer Giant on Track?
· Best Dividend Paying Stock List as of 08/2010
· Davide Campari-Milano SpA – Value Stock with 19.7% EBIT-Margin