Welcome to Extreme Investor Network, where we provide you with unique insights and strategies to help you navigate the world of investing. Recent inflation reports have spooked investors, leading to a sell-off in the markets. But fear not, there are defensive stocks that can provide stability during turbulent times.
The latest producer and consumer price indexes show annualized inflation still above 2%, signaling potential delays in interest rate cuts by the Federal Reserve. This uncertainty has contributed to a 1% slip in the S & P 500 since the beginning of April. However, the benchmark index has seen a 9% increase since the start of 2024.
For investors looking to protect their portfolios from market volatility, rotating into defensively focused stocks could be a smart move. CNBC Pro’s screener tool has identified four S & P 500 stocks that meet specific criteria, including a beta under 1, net income growth rate of 20% or more, gross margins of 30% or higher, and upside potential of at least 10% to the average analyst price target.
Among these defensive picks, ServiceNow and Roper Technologies offer a balance of defensive qualities and exposure to the tech sector. ServiceNow has gained less than 10% this year, with strong analyst support and potential for double-digit upside. Roper, on the other hand, has seen slight declines but is expected to rebound with a buy rating and price target reflecting over 10% growth.
Outside of the tech sector, TJX and Coterra Energy are also recommended defensive stocks. TJX, the parent company of T.J. Maxx and HomeGoods, has the potential for a 16% jump according to analysts, with a dividend yield of 1.6%. Coterra Energy, with a dividend yield of 2.9%, is up 9% this year and is the only buy-rated name in the natural gas exploration and production space according to UBS’s Josh Silverstein.
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