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Today, investors face significant uncertainty due to market volatility, high inflation, low yields, and global tensions. They want to diversify their portfolios to ensure consistent benefits, even during market instability. During turbulent times, defensive stocks become a viable solution. These stocks can withstand the negative impacts of market turbulence, reflecting the investor’s cautious mindset and astuteness. Let’s examine ten defensive stocks that demonstrate the potential to excel even in turbulent markets:
Fortify Your Investments: Discover the Top 10 Defensive Stocks for Volatile Markets!
- Consolidated Edison
- Eli Lilly
- Lockheed Martin
- Axon Enterprise
- Procter and Gamble
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Amidst significant losses among other pharmaceutical stocks, AbbVie has showcased its resilience in 2023. The company’s remarkable performance in 2022 can be attributed, in part, to its robust portfolio of blockbuster medications and a thriving research pipeline. Additionally, for low-risk investors, AbbVie’s dividend yield of approximately 4.1% serves as an enticing proposition, ensuring steady earnings even during market downturns.
Enbridge, a distinguished Canadian blue-chip stock, has established a solid reputation for delivering consistent performance in the energy sector’s mid-stream oil activities. Recognized for its generous dividend payouts, Enbridge has remained steadfast in growing investors’ income over the past two decades, despite market volatility. Enbridge has earned a coveted position among Canada’s Dividend Aristocrats. It achieved a remarkable dividend yield of over 7% in the most recent year, making it a valuable addition to any portfolio and signifying a reliable source of income stability.
This energy delivery system and steam services company posted revenue of $4.4 billion in the first quarter of 2023, an 8.4% growth from last year. It has a customer base of 3.5 million electricity consumers and an additional one million natural gas consumers in New York City. It enjoys a substantial foundation of steady and predictable demand, irrespective of the economic climate. Consolidated Edison has steadily increased dividends for the past 48 years. Its current dividend yield is 3.42%.
The healthcare sector is generally considered a safe option due to the essential nature of medicines and healthcare facilities today. Eli Lilly, a prominent pharmaceutical company, has achieved substantial growth primarily through organic means while catering to the diverse needs of the healthcare industry. Furthermore, recent discussions surrounding Eli Lilly obtaining necessary approvals in dermatology and immunology suggest that the company is poised for significant advancements, promising favourable returns for its investors.
Because of the predictability of its core industry – defence – Lockheed is a top defensive stock. Contracts with the United States Department of Defence account for over 70% of the company’s annual income. Furthermore, Lockheed Martin expects to receive significant money from its F-35 program until 2070. The company provides shareholders with a robust long-term revenue stream and a reasonable dividend yield at current prices. These two variables should entice investors concerned about another market-wide downturn.
The famous Arizona-based company that develops technology and weapons for the military and law enforcement plays an integral role in protecting critical data of the federal system. With a large clientele base consisting of state, federal, and government agencies and long-term contracts, Axon Enterprise becomes the perfect candidate to qualify as a top defensive stock.
Procter and Gamble
Consumer stocks like P&G are resilient to economic changes considering a lot of their sales fall under the “essential goods” category. Procter and Gamble is a popular household name, making it a great choice while building a resilient portfolio. In 2022, Procter and Gamble gave massive amounts of returns to its investors in the form of dividends and buybacks. Its solid past, clubbed with a strong chance of growth in the future, makes this stock worthy of being on the list of must-have defensive stocks.
This famous brand is the go-to coffee place and is quite popular among young people. Given Starbucks’ high margins, expanding the channel development division will certainly assist earnings growth. Analysts now forecast that the company’s earnings will climb by almost 18% per year on an annualized basis through 2027. Starbucks already trades at a premium because of these growth expectations. Nonetheless, the stock is certainly worth paying a premium for right now.
Apple is one of the must-haves when it comes to having defensive stocks for the portfolio. Its proven history of providing significant returns and its recent business developments make it even more lucrative for investors looking for defensive stocks.
Vanguard Real Estate Index Fund
Vanguard Real Estate Index Fund invests in REITs and aims to provide high-income and long-term capital growth. The ETF offers excellent exposure to the whole REIT industry, emphasizing the industry’s largest REITs. The Vanguard Real Estate ETF’s expense ratio is one feature that distinguishes it from others. It is four times lower than the industry average of 0.24%, at 0.06%. This allows investors to keep a more significant portion of their profits.
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