{"id":513415,"date":"2022-03-31T04:55:44","date_gmt":"2022-03-31T08:55:44","guid":{"rendered":"https:\/\/financhill.com\/blog\/?p=513415"},"modified":"2022-03-09T22:11:16","modified_gmt":"2022-03-10T03:11:16","slug":"what-are-some-defensive-stocks","status":"publish","type":"post","link":"https:\/\/financhill.com\/blog\/investing\/what-are-some-defensive-stocks","title":{"rendered":"What Are Some Defensive Stocks?"},"content":{"rendered":"<p><span data-preserver-spaces=\"true\"><em>What are some defensive stocks?<\/em> After experiencing the pitfalls of a volatile market, many investors begin to seek safety for their investment portfolio. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">One of the best ways investors can keep their portfolios level, even during bear markets, is to begin investing in defensive stocks. While defensive stocks do not give the returns that growth stocks can during bull markets, investing in a mix of growth and defensive stocks is a good way to keep investment portfolios stable regardless of the state of the markets and overall economy. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Here are some of the best defensive stocks to invest in this year.&nbsp; &nbsp;<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Understanding Defensive Stocks&nbsp;<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">While mitigating risks is always valuable when it comes to investing, you might be wondering how exactly defensive stocks help to mitigate investment risks. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Well, <strong>a defensive stock is simply a stock that continues to provide its shareholders with stable earnings regardless of the state of the overall stock market through consistent dividend payments.<\/strong>&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In addition, defensive stocks exist because of the constant demand for their products. Most defensive stocks come from well-established companies that sell products along the lines of food, beverages, tobacco, healthcare, REITs, as well as a few others. Overall, some common characteristics of defensive stocks include:<\/span>&nbsp;<\/p>\n<ul>\n<li><strong>A defensive stock is a stock that provides stable earnings through consistent dividends.&nbsp;<\/strong><\/li>\n<li><strong>Most defensive stocks come from well-established companies that sell products that are continually in demand.&nbsp;<\/strong><\/li>\n<li><strong>Defensive stocks generally provide investors with steady long-term gains with low risk compared to other more volatile stock options.&nbsp;<\/strong><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">(Note: Defensive stocks should not be confused with Defense stocks. Defense stocks refer to the stocks of companies that produce or sell weapons, ammunition, and other types of security options.)<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">What Are the Pros and Cons of Defensive Stocks?&nbsp;<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Just like with any investment, there are pros and cons. The following are some key advantages and disadvantages associated with defensive stock options.&nbsp;<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Pros of Defensive Stocks&nbsp;<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">During bear markets, defensive stocks tend to perform above the market.&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Defensive stocks help investors to preserve capital through lower-risk investments.&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Defensive stocks generally pay shareholders a consistent dividend payment which is extremely beneficial during market downturns.&nbsp;<\/span><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">Cons of Defensive Stocks<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">During bull markets, defensive stocks tend to perform below the market.&nbsp;<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">While defensive stocks help to protect investment portfolios from loss, they also tend to offer less potential for growth overall.&nbsp;<\/span><\/li>\n<\/ul>\n<h2><span data-preserver-spaces=\"true\">Examples of Defensive Stocks&nbsp;<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Now that we know more about defensive stocks, along with their pros and cons, it&#8217;s time to take a deeper look at some examples of defensive stocks. The following are some of the most common examples of defensive stock categories.&nbsp;<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Utilities&nbsp;<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Water, gas, and electric utilities are always in demand, which makes utility stocks good defensive stocks to invest in.&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Some common utility stocks include:<\/span><\/p>\n<ul>\n<li><strong>Dominion Energy Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/d\">NASDAQ:D<\/a>)<\/strong><\/li>\n<li><strong>Duke Energy Corp. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/duk\">NASDAQ:DUK<\/a>)<\/strong><\/li>\n<li><strong>Xcel Energy Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/xel\">NASDAQ:XEL<\/a>)<\/strong><\/li>\n<li><strong>CMS Energy Corp. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/cms\">NASDAQ:CMS<\/a>)<\/strong><\/li>\n<li><strong>NRG Energy Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/nrg\">NASDAQ:NRG<\/a>)<\/strong><\/li>\n<li><strong>Consolidated Edison (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/ed\">NASDAQ:ED<\/a>)<\/strong><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">Consumer Goods&nbsp;<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Consumer goods or consumer staples stocks like food, beverages, hygiene products, tobacco products, and household goods all remain in demand even during the economic downturn.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\"> Therefore, stocks in companies that generate their income flow through common consumer goods serve as exceptional defensive stocks.&nbsp;<\/span>&nbsp;<\/p>\n<p><span data-preserver-spaces=\"true\">Some common consumer staples stocks include:<\/span><\/p>\n<ul>\n<li><strong>Costco Wholesale (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/cost\">NASDAQ:COST<\/a>)<\/strong><\/li>\n<li><strong>Procter &amp; Gamble (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/pg\">NASDAQ:PG<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>PepsiCo (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/pep\">NASDAQ:PEP<\/a>)<\/strong><\/li>\n<li><strong>Coca-Cola Co. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/ko\">NASDAQ:KO<\/a>)<\/strong><\/li>\n<li><strong>General Mills (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/gis\">NASDAQ:GIS<\/a>)<\/strong><\/li>\n<li><strong>Estee Lauder (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/el\">NASDAQ:EL<\/a>)<\/strong><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">Healthcare&nbsp;<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">Healthcare is another industry that remains in high demand even during recessions and market downturns. With healthcare and health services continuously in high demand, healthcare stocks are also great defensive stocks to invest in.&nbsp;<\/span>&nbsp;<\/p>\n<p><span data-preserver-spaces=\"true\">Some common healthcare stocks include:<\/span><\/p>\n<ul>\n<li><strong>Vertex Pharmaceuticals (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/vrtx\">NASDAQ:VRTX<\/a>)<\/strong><\/li>\n<li><strong>Intuitive Surgical (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/isrg\">NASDAQ:ISRG<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>Teladoc Health (<a href=\"https:\/\/financhill.com\/stocks\/nyse\/tdoc\">NASDAQ:TDOC<\/a>)<\/strong><\/li>\n<li><strong>UnitedHealth Group Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/unh\">NASDAQ:UNH<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>Pfizer Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/pfe\">NASDAQ:PFE<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>AbbVie Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/abbv\">NASDAQ:ABBV<\/a>)<\/strong><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">Telecom<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">In the 21st century, telecom services will always remain in high demand even during economic downturns.&nbsp;<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Some common telecom stocks include:&nbsp;<\/span><\/p>\n<ul>\n<li><strong>Verizon Communications (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/vz\">NASDAQ:VZ<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>Comcast (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/cmcsa\">NASDAQ:CMCSA<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>American Tower (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/amt\">NASDAQ:AMT<\/a>)&nbsp;<\/strong><\/li>\n<li><strong>AT&amp;T (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/t\">NASDAQ:T<\/a>)<\/strong><\/li>\n<li><strong>T-Mobile (<a href=\"https:\/\/financhill.com\/stocks\/nasdaq\/tmus\">NASDAQ:TMUS<\/a>)<\/strong><\/li>\n<li><strong>Charter Communications (<a href=\"https:\/\/financhill.com\/stocks\/nasdaq\/chtr\">NASDAQ:CHTR<\/a>)&nbsp;&nbsp;<\/strong><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">Apartment REITs<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">A REIT or real estate investment trust refers to a company that owns income-producing real estate. When it comes to defensive investing, apartment REITS serve as great defensive stocks as people will always be in need of housing and shelter even during economic recessions. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">However, when looking for defensive REITs, it&#8217;s important to stay away from high-end apartments, industrial REITs, or office building REITs, as these REITs can be affected by the state of the economy.&nbsp;<\/span>&nbsp;<\/p>\n<p><span data-preserver-spaces=\"true\">Some common apartment REITs include:&nbsp;<\/span><\/p>\n<ul>\n<li><strong>Equity Residential (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/eqr\">NASDAQ:EQR<\/a>)<\/strong><\/li>\n<li><strong>AvalonBay Communities Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/avb\">NASDAQ:AVB<\/a>)<\/strong><\/li>\n<li><strong>Essex Property Trust, Inc. (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/ess\">NASDAQ:ESS<\/a>)<\/strong><\/li>\n<li><strong>Apartment Investment and Management Company (<a href=\"https:\/\/financhill.com\/stocks\/sp500\/aiv\">NASDAQ:AIV<\/a>)<\/strong><\/li>\n<li><strong>UDR Inc. (<a href=\"https:\/\/financhill.com\/stocks\/nyse\/udr\">NASDAQ:UDR<\/a>)<\/strong><\/li>\n<li><strong>Camden Property Trust (<a href=\"https:\/\/financhill.com\/stocks\/nyse\/cpt\">NASDAQ:CPT<\/a>)<\/strong><\/li>\n<\/ul>\n<h2><span data-preserver-spaces=\"true\">What Are the Best Defensive Stocks to Buy?&nbsp;<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Now that we&#8217;ve learned all about the different types of defensive stocks, let&#8217;s take a look at some of the best defensive stocks to buy this year. Here are five top defensive stock buys for this year below.&nbsp;<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">1. Walmart (<a href=\"https:\/\/financhill.com\/search\/valuation\/WMT\">NASDAQ:WMT<\/a>)<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">Type of Defensive Stock: Consumer Staple<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Market Value: $387 Billion<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Dividend Yield: 1.6%<\/span><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">2. UnitedHealth Group (<a href=\"https:\/\/financhill.com\/search\/valuation\/unh\">NASDAQ:UNH<\/a>)<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">Type of Defensive Stock: Healthcare<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Market Value: $432 Billion<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Dividend Yield: 1.3%<\/span><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">3. CVS Health (<a href=\"https:\/\/financhill.com\/search\/valuation\/cvs\">NASDAQ:CVS<\/a>)<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">Type of Defensive Stock: Healthcare<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Market Value: $138 Billion<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Dividend Yield: 2.1%<\/span><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">4. Costco Wholesale Corporation (<a href=\"https:\/\/financhill.com\/search\/valuation\/cost\">NASDAQ:COST<\/a>)<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">Type of Defensive Stock: Consumer Staples<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Market Value: $234 Billion<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Dividend Yield: 0.6%<\/span><\/li>\n<\/ul>\n<h3><span data-preserver-spaces=\"true\">5. Procter &amp; Gamble (<a href=\"https:\/\/financhill.com\/search\/valuation\/pg\">NASDAQ:PG<\/a>)<\/span><\/h3>\n<ul>\n<li><span data-preserver-spaces=\"true\">Type of Defensive Stock: Consumer Staples<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Market Value: $357 Billion<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Dividend Yield: 2.37%<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">Ultimately, if you&#8217;re looking to safeguard your investment portfolio, investing a good portion of your portfolio into defensive stocks would be a great investment strategy to meet your investment goals.&nbsp;<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What are some defensive stocks? After experiencing the pitfalls of a volatile market, many investors begin to seek safety for their investment portfolio. One of the best ways investors can keep their portfolios level, even during bear markets, is to begin investing in defensive stocks. While defensive stocks do not give the returns that growth [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":513417,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[22],"tags":[],"class_list":["post-513415","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/financhill.com\/blog\/wp-content\/uploads\/2022\/03\/Untitled-design-2022-03-09T205828.829.jpg","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9czeV-29yT","_links":{"self":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/513415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/comments?post=513415"}],"version-history":[{"count":7,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/513415\/revisions"}],"predecessor-version":[{"id":513426,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/513415\/revisions\/513426"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/media\/513417"}],"wp:attachment":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/media?parent=513415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/categories?post=513415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/tags?post=513415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}