After a brutal December wiped out a positive year for the major equity indexes in 2018, investors became worried that the bull market was over after almost 10 years. Whether 2019 brings as much volatility as 2018 remains to be seen, but many investors are concerned that valuations are becoming too high and cannot be supported much longer.
24/7 Wall St. has looked for value and defensive stocks that are likely to survive most major stock market volatility. These company names are leaders in consumer goods, utilities, and other areas of the economy that offer goods and services needed in good times and bad.
As 2019 kicks off, many analysts and investors are expecting the great earnings gains of 2018 to taper off now that the impact of the corporate tax reform has been fully embedded in expectations. At the same time, the U.S. Federal Reserve seems poised to finally start backing away from the endless interest rate hikes due to slowing economic growth in the United States and the major international economies. Meanwhile, the as-of-yet unresolved trade and tariff issues with China continue to have many in the business community worried.
Investors who have longer views than a week or a month tend to maintain the same level of exposure to the stock market in good times or bad. They may have less of their portfolio in stocks, and when they look for stocks, they tend to flock to shares of companies that they believe will keep operating well without major effects to their businesses if a major stock market selloff occurs.
Defensive stocks that can withstand bad markets tend to have a long history of dividends and dividend hikes. Warren Buffett is considered to be a prime value investor who looks for companies that will stand the test of time. His advice to investors has been simple but harder to implement: “Be fearful when others are greedy, and to be greedy when others are fearful.”
24/7 Wall St. has chosen a list of companies whose businesses will remain relatively stable during times of market turmoil. The list includes the most recent share prices, a 52-week trading range, and the current dividend yield on each company. We have also included information about each company’s history, revenue, or the size of its customer base. Expected revenue figures are from Thomson Reuters.
Investors should always consider that there are no assurances that defensive stocks will hold up in a down market. If the market loses 10% or 20% of its value in a short period, it tends to hurt most equities, although defensive stocks might hurt less. Here are 15 top defensive stocks that investors are likely to pour money into if they become worried about the next selloff turning into a major correction or even a bear market.