Best Defensive Stocks to Watch or Invest In Right Now
Written by
Joseph Hostetler
Edited by
Joe Evans
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Defensive stocks can help you sleep at night when the market gets rocky. These companies tend to hold up well — even during downturns — because they offer essential products and services people still need, no matter what’s happening in the economy.
Whether you’re a cautious beginner or a seasoned investor looking to hedge against volatility, adding some of the best defensive stocks to your portfolio could be a smart move in 2026.
Defensive Stocks — At a Glance
Company Ticker Sector Risk Profile Why It Stands Out Procter & Gamble PG Consumer Staples Low Essential household products with stable demand Johnson & Johnson JNJ Healthcare Low Diversified healthcare revenue and strong balance sheet Coca-Cola KO Consumer Staples Low Global brand with consistent cash flow Duke Energy DUK Utilities Low to Moderate Regulated utility revenues and predictable earnings Walmart WMT Consumer Defensive Low to Moderate Scale and pricing power during downturns Quick Takeaway: Defensive stocks focus on durability over growth, making them especially useful during periods of economic slowdown or market stress.
What Makes a Stock “Defensive”?
Defensive stocks typically share several traits:
- Demand for products or services remains stable in recessions
- Strong cash flow and established market positions
- Lower earnings volatility compared with the broader market
- Often pay dividends, though income isn’t guaranteed
These stocks are commonly found in consumer staples, healthcare and utilities.
Best Defensive Stocks to Consider Right Now
Here’s a snapshot of several well-established companies that continue to demonstrate stable demand, durable cash flow and lower volatility compared with the broader market:
| Company | Ticker | Sector | Dividend Yield* | Recent Performance Trend | Why It’s Defensive |
|---|---|---|---|---|---|
| Johnson & Johnson | JNJ | Healthcare | about 3% | Steady | Diversified healthcare products with consistent demand |
| Procter & Gamble | PG | Consumer Staples | about 2.5% | Steady | Essential household brands used regardless of economic conditions |
| Walmart | WMT | Consumer Defensive | about 1.5% | Resilient | Grocery and low-cost retail benefit during economic pressure |
| Coca-Cola | KO | Consumer Staples | about 3% | Stable | Global beverage demand with strong brand loyalty |
| Duke Energy | DUK | Utilities | about 4% | Predictable | Regulated utility providing essential electricity services |
*Dividend yields are approximate and can change based on company policy and market conditions.
Why These Stand Out:Each of these companies operates in an industry where demand tends to remain relatively stable even during economic slowdowns, making them common building blocks in defensive investment strategies.
Best Defensive Stocks To Watch
Procter & Gamble (PG)
Procter & Gamble sells everyday necessities like cleaning products and personal care items, which keeps demand steady even during economic slowdowns. Its broad brand portfolio helps smooth revenue across different categories and regions. The company’s pricing power and consistent cash flow make it a core defensive holding. PG is often used as a stabilizer in long-term portfolios.
Johnson & Johnson (JNJ)
Johnson & Johnson benefits from diversified exposure across pharmaceuticals, medical devices and healthcare products. Demand for healthcare tends to remain resilient regardless of economic conditions. Its scale and balance sheet strength help support long-term stability. JNJ is frequently viewed as one of the most defensive names in healthcare.
Coca-Cola (KO)
Coca-Cola’s global beverage portfolio generates recurring revenue across economic cycles. Consumers tend to continue buying low-cost discretionary items like soft drinks even during downturns. The company’s distribution network and brand recognition provide durable competitive advantages. KO is commonly associated with steady cash flow and defensive income strategies.
Duke Energy (DUK)
As a regulated utility, Duke Energy earns predictable revenue by providing essential electricity services. Utility demand remains stable in both strong and weak economic environments. Rate regulation helps reduce earnings volatility, though growth is typically modest. DUK often appeals to investors seeking lower-risk exposure.
Walmart (WMT)
Walmart tends to benefit during economic pressure as consumers trade down to lower-priced retailers. Its scale allows it to maintain competitive pricing while preserving margins. Grocery and essential goods make up a large portion of sales, supporting steady demand. WMT combines defensive characteristics with long-term growth exposure.
Why Invest in Defensive Stocks?
Defensive stocks are built for resilience. They tend to:
- Hold value during recessions
- Offer stable, often growing dividends
- Operate in essential industries (food, health, energy, utilities)
- Reduce volatility in your portfolio
These stocks don’t always offer sky-high returns, but they shine when everything else is falling.
Defensive Stocks vs. Growth or Cyclical Stocks
How do defensive stocks compare to other investing options?
| Investment Type | Risk Level | Growth Potential | Volatility | Income Potential |
|---|---|---|---|---|
| Defensive Stocks | Low | Moderate | Low | High (via dividends) |
| Growth Stocks | Medium-High | High | High | Low |
| Cyclical Stocks | High | Varies | High | Varies |
Defensive stocks are ideal if you’re prioritizing stability, income and protection against downturns.
Defensive Stocks vs Other Investment Approaches
Defensive stocks play a different role than growth-focused investments.
Defensive Stocks vs Growth Stocks
Growth stocks aim for rapid earnings expansion but are more sensitive to economic cycles. Defensive stocks prioritize stability and resilience.
Defensive Stocks vs Bonds
Bonds offer predictable income but limited upside. Defensive stocks can provide income plus potential long-term appreciation.
Defensive Stocks vs Cash
Holding cash reduces risk but offers a limited return. Defensive stocks allow capital to remain invested with lower volatility.
How to Buy Defensive Stocks
Getting started is easy:
- Open a brokerage account – Consider platforms like Fidelity, Schwab or Robinhood.
- Search by ticker – Examples include JNJ, PG, WMT, KO, PEP.
- Review the company’s fundamentals – Look at dividends, earnings and recent performance.
- Decide your allocation – Defensive stocks are great portfolio anchors or safety nets.
- Consider reinvesting dividends – Use DRIP programs to grow your holdings steadily.
Want an easier way to invest? Consider defensive ETFs like XLP (Consumer Staples Select Sector SPDR) or VPU (Vanguard Utilities ETF) for broad exposure.
Final Take to GO: Are Defensive Stocks Worth Considering?
Defensive stocks can be valuable during periods of uncertainty, slowing growth or market volatility. While they may lag in strong bull markets, their ability to protect capital and smooth returns makes them a useful tool for long-term investors.
For investors focused on stability, defensive stocks can help keep portfolios grounded when conditions become unpredictable.
Ready to get started? Choose a few solid names, or go the ETF route for instant diversification. Want to go deeper? Check out our guide to dividend investing or how to build a recession-proof portfolio.
Defensive Stocks FAQ
- What are defensive stocks?
- Defensive stocks are shares of companies that provide essential goods or services and tend to perform more steadily during economic downturns.
- Do defensive stocks pay dividends?
- Many defensive stocks offer dividends, though payouts can change based on company performance and market conditions.
- Are defensive stocks risk-free?
- No. Defensive stocks can still decline in value, but they are generally less volatile than growth stocks.
- When do defensive stocks perform best?
- They often perform best during economic slowdowns or periods of market uncertainty.
- Should defensive stocks replace growth investments?
- Typically no. Defensive stocks are most effective when combined with growth and income assets in a diversified portfolio.
Information is accurate as of Jan. 13, 2026.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
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- Charles Schwab "Roles Defensive Assets Play in a Winning Strategy"
- Investor.gov "Ex-Dividend Dates: When Are You Entitled to Stock and Cash Dividends"
- Investor.gov "Say “NO GO to FOMO”"
- U.S. Securities and Exchange Commission "Financial Navigating in the Current Economy: Ten Things to Consider Before You Make Investing Decisions"
- Investor.gov "Direct Investing"
