Defensive stocks: Aetna's steady earnings


Given the current choppy, consolidating market conditions, adding a few defensive plays is a prudent tack. Among insurers, Aetna Inc. (NYSE: AET) is worth a review.

Aetna's wide product offerings and comprehensive coverage is an operational strength, as is its geographic footprint. These factors, along with cost controls, should enable Aetna to maintain solid earnings growth in 2007-2009. The Reuters F2007/F2008 EPS estimates for AET are $3.43/$3.89.

What should one not expect from Aetna? Ill-conceived, poorly-researched endeavors. Aetna is a deliberate, move-forward-cautiously operation with a corporate culture that reflects many of the values of the land of steady habits, its home state of Connecticut. Aetna's shares rose $2.08 to $54.98 in Thursday afternoon trading.

Technically, Aetna's chart looks good. AET's only recent major breach of its 50-day moving average occurred during the August 2007 market sell-off, and the stock has been above its 200-day moving average for about a year.

Stock Analysis: Aetna is a low-risk stock. If you don't already own a consumer product or insurance defensive stock, consider adding AET to your portfolio. Sell / Stop Loss: $32.

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Last updated: February 13, 2012: 01:55 AM

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