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 2025.
Best Defensive Stocks in 2025
Here’s a look at some of the most stable, high-performing defensive stocks to consider this year:
| Company | Ticker | Sector | Dividend Yield | One-Year Return | Why It’s Defensive |
|---|---|---|---|---|---|
| Johnson & Johnson | JNJ | Healthcare | ~3.0% | +7.2% | Medical products and pharmaceuticals with consistent demand |
| Procter & Gamble | PG | Consumer Staples | ~2.6% | +6.4% | Household goods leader (Tide, Gillette, Pampers) |
| Walmart | WMT | Retail | ~1.5% | +9.1% | Affordable goods and groceries with wide reach |
| Coca-Cola | KO | Beverages | ~3.2% | +5.8% | Global beverage brand with high brand loyalty |
| PepsiCo | PEP | Beverages/Snacks | ~2.9% | +6.0% | Consumer favorite with both drinks and food exposure |
| Duke Energy | DUK | Utilities | ~4.1% | +4.3% | Essential electricity provider with a solid yield |
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.
Risks of Investing in Defensive Stocks
Even the best defensive stocks aren’t risk-free. Some potential downsides include:
- Lower growth in bull markets
- Dependence on consumer staples or regulated sectors
- Price stagnation during booming tech or cyclical rallies
To balance your risk, many investors pair defensive holdings with growth or tech stocks.
Trends Shaping Defensive Stocks in 2025
Several current trends are keeping defensive stocks in the spotlight:
- Rising interest in dividends as rates stabilize
- Increased consumer demand for value and essentials
- Healthcare innovation and aging population driving JNJ and similar stocks
- Climate resilience boosting utility sector interest
These macro trends may help bolster the long-term appeal of defensive names.
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: Build Stability with the Best Defensive Stocks
In unpredictable markets, defensive stocks can help protect your portfolio while still delivering steady income.
While they might not skyrocket like tech names, they offer peace of mind — and that’s worth a lot when the economy is on edge.
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.
FAQs: Best Defensive Stocks
Learn more about the best defensive stocks so you can make an informed decision about whether or not to include them in your portfolio.- What are defensive stocks?
- They’re stocks in industries that provide essential products or services -- think food, utilities and healthcare -- that people still buy during a downturn.
- Are defensive stocks good for beginners?
- Yes. They’re generally stable, dividend-paying and less volatile -- perfect for conservative or first-time investors.
- Do defensive stocks always go up during a recession?
- Not always, but they tend to outperform riskier sectors like tech, luxury goods or discretionary retail.
- Are ETFs better than individual stocks for defense?
- It depends. ETFs offer diversification, while individual stocks let you target specific companies. Both can work together.
Information is accurate as of May 23, 2025.
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"
