Defensive stocks are companies that deliver consistent revenue and earnings regardless of what is happening in the broader economy. This has the effect of allowing these stocks to outperform the market when the economy is in a downturn. But it also means that these stocks are frequently overlooked during bull markets.
After all, for many investors, particularly younger investors, but the benefit of capturing a dividend is far down on their list of priorities. But it’s specifically their ability to serve as a hedge against volatility that makes defensive stocks worthy of consideration in every portfolio.
One characteristic of defensive stocks is they have a high percentage of institutional ownership. These institutions (hedge funds, large investment banks, mutual funds, etc.) are frequently referred to as the “smart money.” By putting their money into these companies it’s a sign that the company is financially sound and likely to perform well.
Defensive stocks can be found in many sectors. In this presentation, we’re giving you one pick from various sectors.
Click the "Continue to Slide #1" button to view the first company.
