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  • Writer's pictureRealFacts Editorial Team

Midstream Energy and Consumer Staples Offer Value Play

Clorox bottle

This week, Bloomberg host, Romaine Bostick conducted an informative interview with David Bahnsen, current CIO at The Bahnsen Group. Bostick asked Bahnsen which individual stocks he finds attractive at this time. This question set the stage for an enlightening discussion on value and dividend investing. Value investing involves buying stocks that are undervalued compared to their intrinsic worth, while dividend investing focuses on selecting stocks that pay regular dividends to shareholders, aiming for long-term growth and income generation. Both value and dividend investing strategies prioritize a long-term approach while emphasizing fundamental analysis and the potential for sustainable returns.

Bahnsen identified several industries and various companies within them as viable dividend and value investments. He initially highlighted the midstream energy sector as offering highly appealing income due to its large dividend yields. Midstream energy refers to the stage of the oil and gas industry involved in the transportation, storage, and distribution of crude oil, natural gas, and refined petroleum products. Within this sector, he mentioned potential investments such as Energy Transfer (ET) and Enterprise Product Partners (EPD), as well as a broader midstream energy ETF called UTI. Energy Transfer and Enterprise Product Partners currently offer substantial dividend yields of 8.27% and 7.26%, respectively. While referring to midstream energy, Bansen said, “It's growing its dividends double digits per year and still has a very attractive entry yield, I think that's a wonderful story for a value investor who wants good income.”

Furthermore, Bahnsen identified consumer staples as a potential value sector, particularly for investors seeking to diversify away from the crowded top tech performers in the market. He specifically highlighted Clorox (CLX) and General Mills (GIS) as value-oriented options that he considers far from being overvalued. Emphasizing their strong balance sheets and growth potential, Bahnsen believes that these stocks are excellent additions to a value-focused portfolio. Investors seeking value and income-generating assets can explore opportunities in both midstream energy and consumer staples sectors to align with their investment objectives.

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