Market volatility and economic uncertainty are constant reminders that not all investments move in a straight line. For investors seeking stability and consistent returns during turbulent times, defensive stocks offer a safe haven. These stocks typically belong to companies in sectors that are less affected by economic cycles, such as consumer staples, healthcare, and utilities. Defensive stocks are known for providing reliable dividends and maintaining value, even when the broader market is struggling.
Here are five defensive stocks you should consider adding to your portfolio in 2024.
1. Procter & Gamble (PG)
Sector: Consumer Staples
Why It’s Defensive: Procter & Gamble (P&G) is a global leader in consumer goods, offering essential household products such as cleaning supplies, personal care items, and healthcare products. Regardless of the economic environment, consumers continue to purchase products like toothpaste, soap, and laundry detergent. This consistent demand for necessities makes P&G a defensive stock with strong brand recognition and a history of delivering stable returns.
In 2024, P&G’s focus on innovation and cost efficiency is expected to boost its profitability, and its consistent dividend makes it a solid choice for income-focused investors.
Dividend Yield: ~2.5%
2. Johnson & Johnson (JNJ)
Sector: Healthcare
Why It’s Defensive: Johnson & Johnson is a leading healthcare company, known for its diversified portfolio of pharmaceuticals, medical devices, and consumer health products. Healthcare is an industry that remains resilient during economic downturns, as people continue to need medical treatment and essential products like over-the-counter medications and personal care items.
With a long history of increasing dividends and a strong pipeline of innovative drugs, Johnson & Johnson is a defensive stock that offers both growth potential and stability.
Dividend Yield: ~2.9%
3. PepsiCo (PEP)
Sector: Consumer Staples
Why It’s Defensive: PepsiCo is a global leader in the food and beverage industry, with a diverse portfolio that includes snack brands like Frito-Lay and beverages like Pepsi, Gatorade, and Tropicana. The company’s ability to offer products that cater to various consumer preferences and its global reach provide stability, even during challenging economic conditions.
PepsiCo’s consistent revenue streams, coupled with its long track record of dividend growth, make it a reliable defensive stock for 2024. The company’s efforts to innovate with healthier product offerings also position it well for future growth.
Dividend Yield: ~2.8%
4. Duke Energy (DUK)
Sector: Utilities
Why It’s Defensive: The utilities sector is known for its defensive nature, as people need electricity and water regardless of the economy. Duke Energy is one of the largest utility companies in the United States, providing electric and natural gas services to millions of customers. Utilities like Duke Energy have a steady demand, making them reliable investments that generate consistent cash flow, even in recessions.
With a strong dividend history and a focus on expanding its renewable energy portfolio, Duke Energy is well-positioned to offer stability and growth potential in 2024.
Dividend Yield:** ~4.2%
5. Coca-Cola (KO)
Sector: Consumer Staples
Why It’s Defensive: Like PepsiCo, Coca-Cola is another consumer staples giant that benefits from consistent demand for beverages, regardless of the economic climate. With a vast global distribution network and a diversified product portfolio that includes not only carbonated drinks but also water, juices, and sports drinks, Coca-Cola is a strong defensive stock.
Coca-Cola has a proven track record of weathering economic downturns, and its steady dividend growth makes it a reliable choice for conservative investors in 2024.
Dividend Yield: ~3.1%
Why Defensive Stocks Matter in 2024
The stock market can be unpredictable, especially during periods of high inflation, rising interest rates, or geopolitical tensions. Defensive stocks offer protection in these uncertain times by providing stable cash flows, reliable dividends, and less price volatility compared to more cyclical stocks.
These five defensive stocks—Procter & Gamble, Johnson & Johnson, PepsiCo, Duke Energy, and Coca-Cola—are positioned to help investors maintain a steady income and protect their portfolios, even when the broader market is in turmoil. By including defensive stocks in your investment strategy, you can build a portfolio that can weather any economic environment.
