Defensive stocks are stocks that investors believe will outperform the stock market during periods of economic decline or market turbulence. For the uninitiated, defensive stocks tend to be companies that provide essential goods or services, such as food, healthcare, or utilities. They also tend to have strong balance sheets and generate consistent cash flow. As a result, they are less sensitive to economic cycles than other stocks. Notably, some of the more popular defensive firms in the stock market today are the likes of Lockheed Martin (NYSE: LMT), Altria Group Inc. (NYSE: MO), and Costco Wholesale Corporation (NASDAQ: COST).
While defensive stocks may not provide the same upside potential as more risky investments, they can help to protect investors from losses in a down market. Defensive stocks can also provide stability and income during periods of market volatility. However, they may also underperform during bull markets. As a result, investors should carefully consider their investment objectives before adding defensive stocks to their portfolios. With this being said, check out these three defensive stocks in the stock market today.
Defensive Stocks To Invest In [Or Avoid] Today
1. Raytheon Technologies (RTX Stock)
Raytheon Technologies Corporation is an aerospace and defense company. For starters, Raytheon Technologies is engaged in the research, development, manufacturing, and integration of advanced technologies for the US military, other government agencies, and commercial customers. Its products include radar systems, missile defense systems, electronic warfare systems, aircraft engines, satellite communications systems, and cyber security solutions. What’s more, today RTX shareholders enjoy an annual dividend yield of 2.72%.
RTX Recent Stock News
In July, Raytheon reported better-than-estimated second quarter 2022 financial results. In the report, Raytheon Technologies reported Q2 2022 earnings of $1.16 per share and revenue of $16.3 billion. Additionally, the company reaffirmed its full-year 2022 earnings estimates of $4.60 to $4.80 per share, along with revenue estimates of $67.75 billion to $68.75 billion.
Raytheon Technologies Chairman and CEO Greg Hayes commented, “A strong start to the summer travel season drove continued top-line growth and adjusted EPS that exceeded our expectations. Resilient end-market demand along with our differentiated technology solutions generated over $24 billion of awards in the quarter.”
RTX Stock Chart
As of Tuesday’s closing bell, shares of RTX stock are trading at $81.00 a share. Given the company’s recent quarter’s performance and strong track record, do you think RTX stock is a good defensive stock to invest in now?
2. McKesson Corporation (MCK Stock)
Next, we have McKesson Corporation (MCK). In short, McKesson Corporation is a health services and information technology company. The company partner with biopharma companies, care providers, pharmacies, manufacturers, governments, and others to deliver insights, products, and services to help make quality care more accessible and affordable.
MCK Recent Stock News
Aside from that, just this month McKesson announced it has signed an agreement to acquire Rx Savings Solutions. In detail, Rx Savings Solutions is a prescription price transparency and benefit insight company. The company offers affordability and adherence solutions to health plans and employers, with a current reach of more than 17 million patients.
In terms of the transaction, the deal is valued at up to $875 million, with $600 million of that paid upfront, and a maximum of $275 million of consideration dependent upon RxSS’ financial performance through the calendar year 2025. In addition, the transaction is expected to close in the second half of 2023.
Brian Tyler, chief executive officer, of McKesson said this in the company’s news release, “Rx Savings Solutions’ offerings for employers and patients will strengthen McKesson’s ability to help solve the most common medication challenges related to access, affordability and adherence. We expect the acquisition of Rx Savings Solutions to accelerate McKesson’s growth priority in biopharma services by extending our ecosystem of differentiated medication access solutions to patients.“
MCK Stock Chart
Shares of MCK stock are up over 37% year-to-date, outperforming the broader markets thus far in 2022. Meanwhile, on Tuesday MCK stock closed the trading session at $341.47 per share. With this being said, will you be keeping MCK on watch in the stock market today?
3. The Boeing Company (BA Stock)
Finally, we’re going to talk about The Boeing Company (BA). The Boeing Company is an American multinational corporation. In brief, the company designs manufacture, and sells airplanes, rotorcraft, rockets, satellites, and missiles worldwide. Boeing is among the largest global aircraft manufacturers. As well as one of the largest defense contractors in the world based on revenue.
BA Recent Stock News
Back in July, Boeing announced a miss for its second quarter 2022 fiscal results. In the report, Boeing reported a loss of $0.37 per share, along with revenue of $16.7 billion for the 2nd quarter of 2022. This is versus analysts’ estimates for the second quarter, which was a loss of $0.08 per share, on revenue of $17.5 billion.
Furthermore, Dave Calhoun, Boeing President, and Chief Executive Officer had this to say about the quarter’s performance, “We made important progress across key programs in the second quarter and are building momentum in our turnaround. As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022.“
BA Stock Chart
Shares of Boeing stock have dropped over 38% so far in 2022. BA stock finished Tuesday’s trading session at $127.51, which is off approximately 45.49% from its 52-week high. Knowing this, could BA stock be a good buy at its current price levels?