What are defensive stocks and why are they good for market uncertainty?

Defensive stocks are shares in companies that provide essential goods and services people need regardless of economic conditions—like food, utilities, and healthcare. They typically maintain stable revenue even during recessions or market downturns. These stocks generally experience less price volatility than the broader market and often pay reliable dividends, making them attractive when market direction is unclear or during economic uncertainty.

What does "dividend yield" mean?

Dividend yield is the annual dividend payment divided by the stock's current price, expressed as a percentage. For example, if a stock priced at $100 pays $3 in annual dividends, its dividend yield is 3%. This metric helps you compare the income potential between different dividend-paying stocks. Higher yields can indicate better income, though exceptionally high yields might signal company problems. The stocks in this group are selected partly for their reliable dividend payments.

What are "low-beta stocks" mentioned in the description?

Beta measures a stock's volatility compared to the overall market. A beta of 1 means the stock moves in line with the market. A beta less than 1 (low-beta) means the stock is less volatile than the market—when markets fall 10%, a stock with 0.7 beta might only fall 7%. Low-beta stocks, common in essential sectors like utilities and consumer staples, typically experience smaller price swings, making them attractive during uncertain or volatile market periods.

What is the difference between cyclical and non-cyclical companies?

Cyclical companies see their performance strongly tied to economic cycles—they thrive during expansions but struggle during recessions (examples: luxury goods, travel, construction). Non-cyclical companies (also called defensive) provide essential products and services people need regardless of economic conditions, like groceries, medications, and utilities. The stocks in this group are primarily non-cyclical, meaning they tend to maintain more stable performance across different economic environments.

How do dividend payment dates affect my investment?

Dividend payment dates tell you when a company distributes its dividend payments to shareholders. To receive a dividend, you must own the stock before its "ex-dividend date" (typically 1-2 business days before the record date). Understanding payment dates helps with cash flow planning if you're investing for income. Companies with long histories of regular dividend payments on predictable dates—like many in this group—can provide reliable income streams, especially valuable during market uncertainty.

16 handpicked stocks

Market Indecision

Find refuge from market volatility with these carefully selected companies providing essential goods and services. Our professional analysts have handpicked high-quality, dividend-paying stocks in defensive sectors that offer stability when economic futures look uncertain.

Han Tan | Market Analyst

Published on June 18

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Procter & Gamble Company, The

Current price

$152.21

Its vast portfolio of essential household and personal care products ensures consistent demand regardless of economic conditions.

Coca-Cola Company, The

Current price

$66.00

As a global beverage giant with unparalleled brand loyalty, it offers stable revenue and a long history of dividend payments.

Johnson & Johnson

JNJ

Current price

$185.99

A diversified healthcare giant with strong segments in pharmaceuticals, medical devices, and consumer health, offering market resilience.

Duke Energy Corporation

DUK

Current price

$121.57

Pepsico, Inc.

PEP

Current price

$141.76

Colgate-Palmolive Co.

Current price

$78.31

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+5.48%

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About This Group of Stocks

Our Expert Thinking

These stocks represent companies providing life's necessities that remain in demand regardless of economic conditions. When markets feel unpredictable, these businesses offering essential consumer products, utilities, and healthcare services typically demonstrate greater resilience and lower volatility.

What You Need to Know

This collection features established industry leaders with predictable revenue streams and strong dividend histories. These stocks generally won't deliver explosive growth, but they aim to provide more stable returns, reduce portfolio volatility, and generate consistent income through reliable dividend payments.

Why These Stocks

Each company was selected for its non-cyclical demand patterns, proven financial stability, and commitment to shareholder returns. In today's climate of economic uncertainty and market fluctuations, these defensive selections offer the predictability and income potential many investors seek.

Group Performance Snapshot

5.48%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 5.48% over the next year.

10 of 16

Stocks Rated Buy by Analysts

10 of 16 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

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Income You Can Count On

These companies are known for their reliable dividend payments, providing steady income even when market prices fluctuate. Many have histories of increasing dividends year after year.

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Sleep-Better Portfolio Protection

When markets get choppy, these essential businesses tend to hold their value better than most. They sell products people need regardless of economic conditions.

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Less Drama, More Stability

If market swings make you anxious, these stocks typically experience lower price volatility than the broader market, offering a smoother investment experience during uncertain times.

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