What Are Defensive Stocks?

Markets can fluctuate, trending upward, downward, or sideways. When uncertainty looms, investors often turn to defensive stocks. But what exactly defines a defensive stock?

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What are Defensive Stocks?

  • Slow-growth stocks
  • Stocks less affected by market fluctuations
  • High-dividend stocks
  • High-growth stocks

Defensive stocks are non-cyclical, meaning they are less influenced by economic cycles or market volatility.

Which stock groups are typically considered defensive?

  • Utilities (electricity, water, gas)
  • Consumer staples
  • Healthcare
  • Telecommunications
  • All of the above

Due to their industry characteristics, stocks in these sectors often exhibit defensive qualities. However, not all stocks within these groups are defensive; factors like cash flow, debt, consistent dividend history, and strong business performance must also be considered.

What criteria define defensive stocks?

  • Stable dividends
  • Beta < 1
  • Low P/E ratio
  • All of the above

Companies with defensive stocks typically pay consistent annual dividends, largely in cash. Their Beta (price volatility relative to the overall market) is always below 1, and they have a low P/E ratio.

Trạng Chứng

 

– 19:58 30/11/2025

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