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3 defensive stocks to watch in August 2022


Check out these top three defensive stocks in the stock market this week

As investors prepare for key economic data on Wednesday this week, defensive stocks may be worth your attention right now. After all, defensive stocks are a type of investment that can help protect your portfolio during market turbulence. Therefore, they can help reduce the overall risk of your portfolio. Defensive stocks can come from a variety of sectors, but they typically have strong balance sheets and consistent earnings.

In particular, utilities, consumer staples, and healthcare are often seen as defensive sectors. Specifically, we can take a look at key defensive actions such as UnitedHealth Group (NYSE: UNH) and The Procter & Gamble Company (NYSE:PG). While the S&P 500 is down more than 9% year-to-date, these defensive stocks have seen their stock prices rise more than 8% so far this year.

However, it is important to remember that no stock is completely immune to market risk. Defensive stocks can still lose value if the overall market falls sharply. But if you’re looking for a way to help weather the storm during a market downturn, defensive stocks may be worth considering. If you want to invest in defensive stocks now, here are three to check out in the stock market today.

Defensive stocks to buy [Or Avoid] Now

United Parcel Services (UPS Stock)

United Parcel Service (UPS) is a world leader in logistics, offering a wide range of solutions, including the transport of parcels and freight, the facilitation of international trade and the deployment of advanced technologies to manage the world of business more efficiently. As one of the largest companies in the world, UPS has an extensive network of air, land and sea transportation capabilities, and its shares are widely traded on major stock exchanges. Given its size and scope, UPS is often seen as a gauge of the global economy and its stock price is closely watched by investors. Despite some recent challenges, UPS remains a powerful force in the logistics industry, and its stock remains a popular choice for investors.

Last month, UPS announced its second-quarter 2022 results. Plunging, the company posted earnings per share of $3.29, with revenue of $24.8 billion for the second quarter. That was a beat from analysts’ consensus estimate of earnings of $3.14 per share and revenue of $24.6 billion. Additionally, UPS reported a 5.7% year-over-year increase in revenue. Following this strong quarter, the company also announced its regular dividend of $1.52 per share. Following this announcement, UPS has maintained or increased its dividend every year since its IPO in 1999. Given the financial strength and track record, do you have UPS on your list of defensive stocks to watch?

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[Read More] Stock market today: Dow Jones, S&P 500 Open Mixed; Walmart and Home Deport Rally on Earnings Above Expectations

McKesson (MCK shares)

Then let’s dive into McKesson (MCK). The Company is a healthcare supply chain management solutions company. McKesson solutions help streamline the entire healthcare continuum, from patient care to administration. In addition, the company also offers a wide range of software and hardware solutions for healthcare providers, payers and other organizations. MCK stock is an established name in the healthcare industry and its shares are up more than 50% year-to-date. McKesson’s strong fundamentals and growth prospects could make it an attractive investment for long-term investors.

Earlier this month, McKesson announced a beat for its fiscal first quarter 2023 results. In detail, the company reported earnings per share of $5.83 on revenue of $67.2 billion. That’s in comparison with consensus Wall Street earnings estimates of $5.31 a share, on revenue of $64.4 billion. Additionally, revenue grew 7.1% year over year.

McKesson had a strong start to fiscal 2023. Our results this quarter demonstrate the strength of our streamlined portfolio and our successful execution as a diversified healthcare services company,” commented Brian Tyler, CEO. “Our talented associates continue to deliver exceptional performance and we remain confident that our strategy positions McKesson for long-term growth and value creation.

MCK Stock Chart
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Northrop Grumman Corporation (CNP shares)

Next we have Northrop Grumman (NOC). For starters, the company is an American aerospace and defense technology company headquartered in Falls Church, Virginia. Northrop Grumman ranks among the largest defense contractors in the world, with more than 125,000 employees and operations in 30 countries. Northrop Grumman products include aircraft, spacecraft, radar systems and missiles.

In late July, Northrop Grumman reported second-quarter earnings of $6.06 per share on revenue of $8.8 billion. This compares with consensus estimates of $6.03 earnings per share on revenue of $9.1 billion. Meanwhile, the company reaffirmed its guidance for 2022, providing an earnings estimate range of $24.50 to $25.10 per share, on revenue of $36.54 billion. Year-to-date, NOC shares are up more than 26% and the stock is currently trading at $486.94 per share as of Tuesday afternoon.

Kathy Warden, CEO and President, commented in her note to shareholders:Northrop Grumman’s strategy to deliver differentiated solutions in our customers’ priority areas is paying off. In the second quarter, we delivered exceptional growth in bookings and backlog, as well as strong segment operating margins, Demand for Northrop Grumman products and our operational performance remain strong. We confirm our guidance for the full year as we see the tight labor market, which impacted our growth in the first half, starting to ease in the second half.Given all of this, is NOC stock a buy right now?

CNO Stock Chart
Source: TD Ameritrade Terms of Use

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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