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Defensive Stocks: A Safe Haven in Uncertain Times

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  Published in Stocks and Investing on Tuesday, January 20th 2026 at 12:26 GMT by CNBC
      Locale: UNITED STATES

The Appeal of Defensive Sectors

The core strategy revolves around sectors considered less vulnerable to economic cycles. Robert Johnson, CEO of Johnson Fixed Income, rightly points to healthcare, consumer staples, and utilities as prime examples. These sectors cater to needs, not wants; people require medications, household essentials, and electricity regardless of the broader economic climate. This inherent demand provides a bedrock of stability that's often lacking in more cyclical industries like technology or automotive.

Five Stocks to Consider in Uncertain Times

Based on expert analysis and historical performance, here's a closer look at five companies frequently cited as potential safe harbors during market turbulence:

• Johnson & Johnson (JNJ): A cornerstone of defensive investing. JNJ's diversified portfolio - spanning pharmaceuticals, medical devices, and consumer health - significantly mitigates risk. The company's consistent history of dividend increases is another key attraction for income-focused investors. Their established brand and ongoing research & development further solidify their position. Analysts frequently highlight JNJ's ability to adapt and innovate, allowing them to maintain a leading edge even in a dynamic healthcare landscape.

• Procter & Gamble (PG): Think of the everyday essentials you buy - toothpaste, diapers, laundry detergent. Procter & Gamble makes them all. This consistent, predictable demand makes PG remarkably resilient. Like JNJ, P&G's commitment to shareholder dividends provides a tangible return, even during periods of market stress. Their global presence and massive distribution network are also significant advantages.

• Duke Energy (DUK): Utilities are arguably the ultimate defensive play. Providing essential services like electricity and natural gas, Duke Energy's revenue stream is remarkably stable, largely shielded from economic fluctuations. The lower volatility typical of utility stocks, combined with consistent dividend payouts, make them appealing to conservative investors. However, potential regulatory changes and infrastructure investment requirements should be considered.

• Coca-Cola (KO): While a beverage might seem frivolous, Coca-Cola's global brand recognition and loyal customer base provide surprising resilience. Coca-Cola has successfully navigated numerous economic cycles, demonstrating an ability to adapt and innovate. The company's dividend yield is a significant draw for income-seeking investors.

• Walmart (WMT): Walmart's focus on offering affordable goods attracts budget-conscious consumers, a demographic that remains consistently active even during economic downturns. Its vast scale and established logistics network contribute to its stability. Competition from online retailers continues to be a factor, but Walmart's ongoing investments in e-commerce and its commitment to value pricing position it for continued success.

Key Characteristics of 'Safe' Stocks

Robert Johnson's assessment - that these companies possess "pricing power, brand recognition, and a history of returning capital to shareholders" - encapsulates the core principles of defensive investing. Pricing power means the ability to maintain profit margins even when facing increased costs or competition. Brand recognition inspires customer loyalty and reduces price sensitivity. And a commitment to returning capital, primarily through dividends, provides investors with a tangible income stream.

Important Considerations & Disclaimer

While these stocks may offer a degree of protection during market turbulence, they are not entirely immune to economic forces. External factors, such as regulatory changes, competition, and evolving consumer preferences, can impact performance. It's vital to conduct thorough research and consider your own risk tolerance before making any investment decisions. This article is intended for informational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor before making investment decisions.