3 Top Defensive Stocks To Watch Right Now

For those keeping track of the latest stock market news, you would know that volatility appears to be a recurring theme. With some arguing that hopes for a “Santa rally” are dwindling, defensive stocks appear to be taking center stage. For the most part, such a shift in investors’ sentiment would make sense. After all, numerous elements are impacting the current growth in markets. To begin with, soaring inflation figures continue to roll in and the Federal Reserve is adjusting its taper strategy accordingly. Subsequently, we could see several interest rate hikes taking place throughout 2022, potentially impacting high-growth sectors.

Secondly, the coronavirus pandemic continues to be on the minds of investors going into 2022. According to the latest data from the U.S. Centers for Disease Control and Prevention (CDC), the Omicron variant is now the top dog in the U.S. Namely, the new variant represents 73% of the virus sequenced nationwide. Given the extremely infectious nature of the variant, the reopening trade is seeing bouts of volatility. This is evident as airline stocks among other reopening stocks seek to recover from their earlier losses in the stock market today. Adding to this would be President Biden’s Build Back Better bill meeting headwinds.

By and large, all of this could paint defensive stocks in a positive light now. From high dividend stocks to gold mining stocks and consumer staples names, this is apparent. These are essentially companies and firms that investors turn to in times of volatility such as now. For one thing, there are plenty of names to consider among defensive stocks as well. This includes the likes of pharma giants like Johnson & Johnson (NYSE: JNJ) and retail giants such as Costco (NASDAQ: COST). With all that said, could one of these defensive stocks be worth investing in now?

Top Defensive Stocks To Watch Ahead Of 2022

Morgan Stanley

First up, we have Morgan Stanley, a leading global financial services company that provides investment banking, securities, wealth management, and investment management services. With offices in over 41 countries, the company serves clients worldwide and this includes corporations, governments, and institutions. MS stock currently trades at $98.34 as of 1:12 p.m. ET after gaining by 42% year-to-date. 

In October, the company reported its third-quarter financials. Net revenue for the quarter was $14.8 billion, a 25.8% increase year-over-year. Net income was $3.7 billion or $1.98 per diluted share. James P. Gorman, Chairman and Chief Executive Officer, said, “The Firm delivered another very strong quarter, with robust revenues and improved efficiency producing an ROTCE of 20%. We had standout performance of our integrated Investment Bank and record net new assets of $135 billion in Wealth Management. Year-to-date, our successful integrations of E*TRADE and Eaton Vance have supported growth of $400 billion in net new client assets across Wealth and Investment Management, bringing our total combined client assets to $6.2 trillion.

On December 15, 2021, Morgan Stanley Capital Partners (MSCP) announced the sale of 24 Seven to a single asset GP-led continuation investment vehicle managed by an affiliate of MSCP. The continuation fund is led by Glendower Capital with participation from other secondary investors including Pantheon. 24 Seven is a leading provider of digital marketing and creative staffing solutions in the U.S., Canada, and the U.K. Also, Morgan Stanley has announced its fourth-quarter 2021 financials results on January 19, 2022, before the market opens. Given this piece of news, is MS stock worth investing in right now?

MS stock chart
Source: TD Ameritrade TOS

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Merck & Co Inc.

Following that, we have Merck, a pharmaceutical company with over 130 years of experience. The company has brought life-saving medicines and vaccines to millions around the globe. It has also been at the frontlines of many of the world’s most challenging diseases. With over 58,000 employees around the world, the company utilizes advanced gene-editing technologies and discovers unique ways to treat these diseases. With MRK stock trading at $75.51 as of 1:12 p.m. ET, could it be worth looking out for?

Well, for one thing, the company could be looking at exciting times ahead this week. Earlier today, sources from Bloomberg noted that the U.S. Food and Drug Administration (FDA) is looking into Merck’s Covid-19 portfolio. In particular, the FDA could be looking to authorize the Covid-19 oral treatment pills from both Merck and Pfizer (NYSE: PFE) as soon as this week. Safe to say, should things go as planned, this would be a major regulatory win for Merck. 

On December 17, 2021, the company announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has adopted a positive opinion recommending approval of Keytruda, Merck’s anti-PD-1 therapy as a monotherapy for the adjuvant treatment of adults with renal cell carcinoma (RCC) at increased risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions. With that being said, is MRK stock a buy right now?

MRK stock chart
Source: TD Ameritrade TOS

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Target Corporation

Another name to consider among defensive stocks now would be Target. Overall, Target is among the largest retailers in the U.S. today. For a sense of scale, the company operates via over 1,900 stores nationwide alongside its Target.com e-commerce portal. All of which have and continue to serve consumers’ daily needs throughout the current pandemic. With gains of over 130% since its pandemic-era low, could TGT stock be a top watch in the stock market now?

Well, to point out, Target appears to be doing well compared to its peers. To put things into perspective, the company’s sales increased by 10% in November. According to Bloomberg, the retailer’s sales growth figures doubled that of rivals Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN). This would serve to highlight the role of Target as an essential retailer. Even with an uptick in Omicron variant cases, the company’s Buy Online Pickup In-Store (BOPIS) services will likely remain a go-to for consumers.

Speaking of Target catering to consumers, the company recently introduced solutions for those looking to do some last-minute shopping. Now, the company is allowing customers to place orders via its same-day BOPIS services through 6 p.m. on December 24. This also applies to deal hunters looking to get their shopping done in-store. Topping all of this off, the company also currently offers a quarterly dividend of $0.66 per share. As such, would you consider adding TGT stock to your watchlist?

TGT stock chart
Source: TD Ameritrade TOS

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