To start off, defensive stocks are a category of stocks that tend to perform well during economic downturns. These are companies that provide essential goods or services that are in high demand. Even when the economy is not doing well. They are often referred to as “recession-proof” stocks. This is because they tend to hold up better than the overall market during difficult economic times.
Retail investors often turn to defensive stocks as a way to mitigate risk in their portfolios. These companies tend to have steady and reliable earnings, which can provide a degree of stability in a volatile market. They also tend to pay dividends, which can provide a steady stream of income for investors.
Some examples of defensive stocks include consumer staples companies such as Procter & Gamble (NYSE: PG), healthcare companies such as Johnson & Johnson (NYSE: JNJ), and utility companies such as Duke Energy (NYSE: DUK). These companies may not have the highest growth potential, but they provide a sense of security during uncertain times. Investing in a mix of defensive and growth stocks can help balance a portfolio and provide protection during market downturns. With this in mind, let’s look at three top defensive stocks to watch in the stock market today.
Defensive Stocks To Buy [Or Sell] In 2023
- Northrop Grumman Corporation (NYSE: NOC)
- General Dynamics Corporation (NYSE: GD)
- Costco Wholesale Corporation (NASDAQ: COST)
Northrop Grumman (NOC Stock)
Leading off, Northrop Grumman Corporation (NOC) is an American global aerospace and defense technology company. The company operates in four business segments: Aerospace Systems, Mission Systems, Technology Services, and Innovation Systems. Its major areas of focus include defense and security, civil government, and commercial customers.
Just last week, the company announced it is currently working on developing AN/APG-85. This is an advanced Active Electronically Scanned Array (AESA) radar for the F-35 Lightning II. They currently manufacture the AN/APG-81 AESA fire control radar, which is a key component of the F-35’s sensor suite. What’s more, Northrop Grumman plays a key role in the development, modernization, sustainment, and production of the F-35 aircraft.
So far in 2023, shares of NOC stock have pulled back by 14.60%. Meanwhile, as of Tuesday morning, NOC stock looks set to open the trading day at around $459.93 a share.
General Dynamics (GD Stock)
Second, General Dynamics Corporation (GD) is an American aerospace and defense corporation. In brief, the company offers a range of products and services in the areas of aerospace, combat systems, information technology, and marine systems.
Last month, The Board of Directors for General Dynamics announced that they will be paying a regular quarterly dividend of $1.26 per share to shareholders on February 10, 2023. The dividend will be paid to shareholders who are recorded on January 20, 2023. As it stands today, GD offers its shareholders an annual dividend yield of 2.10%.
Year-to-date so far, shares of GD stock have retreated 3.34% so far. While, during premarket trading on Tuesday, GD stock is trading modestly higher by 0.27% at $240.95 a share.
Costco Wholesale (COST Stock)
Last but not least, Costco Wholesale Corporation (COST) is a multinational corporation that operates a chain of membership-only warehouse clubs. It offers a wide variety of merchandise at discounted prices to its members.
Earlier this month, the company announced its December 2022 sales results. In detail, Costco Wholesale reported an increase of 7% in net sales for the retail month of December, which ended on January 1st, 2023. Additionally, the company generated $23.80 billion in net sales for this period. This is compared to $22.24 billion in the same period of the previous year. Additionally, for the 18 weeks that ended on January 1st, 2023, the company reported net sales of $82.16 billion. Which represents an increase of 7.6% from $76.34 billion in the same period of the previous year.
So far in January 2023, shares of COST stock have begun to bounce by 7.05%. Meanwhile, as of Tuesday morning premarket, COST stock looks set to open at around $485.00 a share.