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Investors Make Defensive Move to Cigarettes, Utilities, Storage REITs

When I scan the US stock market lately, it seems like nearly every stock or ETF is undergoing a sharp correction or in the process of topping out. And that's leaving aside the groups, like mining and oil and gas stocks, that have been sinking like a stone for over a year or more.

So it really shouldn't come as much surprise that the few stocks holding up in this volatile, declining market are the defensive names. Cigarette makers and electric utilities, for example. Stocks like Philip Morris (PM), Altria (MO), American Electric Power (AEP), Southern Company (SO), and Consolidated Edison (ED).



 
There's one more sector that's been hot with skittish fund managers and investors. IBD reports that institutional demand for public storage REITs has been strong. Some of the stronger names in this group include PSA, EXR, STOR, SSS, and CUBE. 

Here's a weekly chart of PSA, which is up 28% over the past year. It also sports a 2.7% annual dividend yield. The S&P 500 ETF, SPY is down nearly 4% over the same period. 

PSA Public Storage REIT stock chart


The bet here is that the economy will hold up well enough for storage customers to continue their payments, or that the storage REITs will be largely unaffected by future weakness. I'm always more than a little wary of such assumptions, but so far these stocks have held up better than most liquid, big cap stocks.  

Some additional names in the REIT space (these include offices, apartments, or healthcare buildings) that have outperformed the weak indices (SPY, QQQ, IWM) over the past year: ELS, O, MAA, and REG. 

Disclosure: I have no current positions in the stocks mentioned here. This, of course, may change at any time in the future, without public notice. All posts are educational material only, no personal investing advice is offered or implied. 

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