Top 5 defensive stocks to watch in 2025

What are defensive stocks?

Defensive stocks refer to companies within certain industries or with proprietary technologies that are mostly impervious to economic peaks and valleys. They tend to operate positively, even during economic downturns, because they provide products or services that consumers need, regardless of fiscal conditions.

Characteristics of defensive stocks

Defensive stocks can’t be categorised into one sector or by size (although most of them tend to be blue-chip stocks), but they do share numerous characteristics, such as:

• Reduced volatility: Because these stocks are more resistant to the highs and lows of the market, they tend to experience lower volatility in their stock values
• Financial planning: It can be easier for stock traders to plan financially due to the typically stable nature of these shares
• Liquidity: These stocks tend to be blue-chip, or close to it, so they’re frequently traded
• Media coverage: Because they’re such monoliths in their industries, the media tends to cover them more, giving traders plenty of information to learn about these companies

What sectors are classified as defensive stocks?

There are a few sectors that can be classified as defensive stocks. However, remember that all stocks can experience downturns or stagnation. Just because a stock is considered defensive doesn’t mean it’s entirely impervious to all economic conditions – it just has a greater ability to be so.

• Healthcare: People need basic healthcare regardless of economic turmoil
• Utilities: Think water, gas and electricity. Also consider waste management, which is always needed
• Consumer staples: These would be items like groceries and personal care
• Telecommunications: Essential connectivity tends to withstand market downturns

Why trade defensive stocks?

Defensive stocks can be a good option to trade if you’re looking to balance your portfolio with more stable shares. While all trading is risky, it helps to invest in some stocks that tend to weather the market’s conditions, giving you greater security in your portfolio.

Risks of defensive stocks

Here are two pitfalls of trading defensive stocks:

• Not invincible: It’s easy to get caught up in the hype of defensive stocks and their potential ability to withstand headwinds, but they’re not invincible to economic conditions
• Smaller gains: Because they tend to have less volatility than, say, cyclical stocks, the potential for big profits is lower on defensive stocks

Top 5 defensive stocks to watch in 2025

We selected these defensive stocks based on their geographic diversification, recent six-month performance and positions in typical defensive sectors.

Overview of the defensive stocks in this article

You can CFD trade all the stocks in our article with IG UAE, and outright buy Johnson & Johnson and PepsiCo shares via stock trading with us.

All figures are accurate as of 24 November 2025.

Alimentation Couche-Tard Inc (TSX: ATD)

Industry: Retail trade

Market cap: C$68.28 billion¹

Alimentation Couche-Tard is a Canadian multinational best known for its network of convenience stores and fuel retail sites. It operates under several well-known banners, including Circle K, Couche-Tard and Ingo, and has grown into one of the largest convenience-store operators globally.

People need fuel, snacks, coffee, basic groceries and road-trip necessities in all economic environments, meaning demand tends to stay resilient even when consumer spending slows down elsewhere.

A big part of the company’s strength comes from scale. Couche-Tard has thousands of stores across Canada, the US, Europe and parts of Asia, enabling it to negotiate better supply deals, optimise pricing and streamline logistics. Its stores follow a similar playbook but adapt to local preferences, which helps the company maintain strong margins without overcomplicating operations.

Highlights:

• While fuel sales continue to be a big part of the business, Couche-Tard has been investing in alternative revenue streams, like EV charging infrastructure
• Over the past few decades, it has bought and integrated multiple regional and international chains, using mergers and acquisitions (M&A) as a major growth engine
• Its stock price has increased by 6.21% over the past six months. However, be aware that it has decreased by 10.01% year-to-date (YTD), and the value has seen a significant amount of volatility during this time, making it a potential play for CFD traders²

2. Johnson & Johnson (NYSE: JNJ)

Industry: Health technology

Market cap: US$491.26 billion³

Johnson & Johnson is one of the world’s most recognisable healthcare companies and a long-standing component of defensive stock portfolios. J&J is a great example of why healthcare is usually considered a defensive sector: people need medical treatment, surgery and chronic-condition drugs whether the economy is booming or slowing.

Its pharmaceutical division develops treatments across immunology, oncology, neuroscience and infectious diseases. Many of its drugs target long-term or chronic illnesses, which typically generate stable demand. The medical-devices division includes products used in surgery, orthopaedics, cardiovascular treatments and diagnostics. Hospitals and specialists rely on these tools every day, which makes this part of the company’s revenue base relatively predictable.

One of J&J’s biggest strengths is diversification. Unlike companies that rely on a single blockbuster drug or treatment area, J&J spreads its focus across multiple diseases and technologies. This reduces risk and allows it to withstand patent expirations or competitive pressures more smoothly than some of its peers.

Highlights:

• The company invests heavily in innovation, continually refreshing its medicine pipeline and adapting to shifts in global healthcare demand
• Its cash flow is steady, its dividend history is exceptionally strong and its position in healthcare makes it less sensitive to broad economic cycles
• Its stock price has increased by 33.27% over the past two quarters⁴

3. PepsiCo, Inc (Nasdaq: PEP)

Industry: Consumer non-durables

Market cap: US$200.08 billion⁵

PepsiCo is one of the world’s largest food and beverage companies, with a diverse mix of global brands ranging from soft drinks to snacks, cereals, sports drinks and bottled water.

While the Pepsi soft drink is its most iconic product, the company’s real strength lies in its balance between beverages and packaged foods. This broad portfolio helps PepsiCo remain resilient in economic downturns because many of its products – from snacks to breakfast foods – are everyday items that consumers continue purchasing even when tightening budgets.

The company has invested heavily in becoming more agile and data driven. It uses consumer insights to shift quickly toward new preferences, such as healthier snacks, low-sugar drinks and premium hydration brands. This ability to adapt keeps the company relevant across generations and supports long-term growth.

Highlights:

• Its global distribution network is a major asset, ensuring its products reach a wide range of markets, from developed economies to fast-growing emerging regions
• PepsiCo’s appeal comes from its consistency. Food and beverages are non-cyclical purchases; consumers might trade down to cheaper options, but they rarely stop buying snacks or drinks altogether
• Its stock price has risen by 12.94% over the past six months. Having said that, YTD, the share price is down 4.28%⁶

4. Enel SpA (MIL: ENEL)

Industry: Utilities

Market cap: €89.22 billion⁷

Enel is one of Europe’s largest utility companies and a major player in electricity, natural gas and renewable energy. Headquartered in Italy but operating across more than 30 countries, Enel provides essential services that households and businesses depend on every day.

Utilities are one of the easiest defensive sectors to understand: regardless of economic conditions, people continue to consume electricity and power their homes, workplaces and digital devices.

Much of Enel’s revenue comes from regulated activities, such as electricity distribution. Regulated utilities operate under government frameworks that set pricing and ensure stable, predictable income. This reduces exposure to market volatility and gives companies like Enel resilience during recessions or periods of economic uncertainty.

Through Enel Green Power, the company has become one of the biggest renewable operators in the world, with assets spanning wind, solar, hydro and geothermal.

Highlights:

• Investing in renewables helps reduce exposure to fuel-price volatility
• Like many utilities, Enel is considered a dividend-friendly stock with reliable cash flow. While the energy transition requires ongoing investment, the underlying demand for electricity remains solid
• Its stock price has gone up by 9.49% over the past two quarters, with a 27.78% increase YTD⁸

5. NTT Inc (TSE: 9432)

Industry: Communications

Market cap: JP¥13.14 trillion⁹

Nippon Telegraph and Telephone (NTT) is one of Japan’s largest telecommunications and IT services companies, and a classic example of a defensive business. Telecom providers tend to be more stable than many sectors because mobile, broadband and data connectivity are essential services. People keep paying their phone and internet bills even during recessions, which helps companies like NTT maintain steady, recurring revenue.

It operates across multiple segments: mobile communications (NTT DoCoMo), fixed-line telephony, fibre broadband, data centres and enterprise IT services. This combination of consumer and business operations gives the company a diversified income base.

The telecom side delivers predictable subscription revenue, while the IT-services division –including NTT Data – taps into long-term trends such as digital transformation, cloud computing and cybersecurity.

It owns extensive fibre networks, data centres, subsea cables and mobile towers – the kind of assets that are expensive to build and difficult for competitors to replicate. This gives NTT strong competitive positioning and long-term pricing power.

Highlights:

• NTT has a close relationship with the Japanese government, which holds a significant stake in the company
• Its stock price has seen a conservative 2.05% increase over the past six months, but has fallen by 3.08% YTD. The stock has shown some volatility during this time, creating potential opportunities for CFD traders¹⁰

How to trade defensive stocks with IG UAE

CFDs

1. Open a CFD trading account with IG UAE
2. Search for defensive stocks on the IG platform
3. Decide whether to go long (buy) or short (sell)
4. Choose your position size
5. Set stop-loss and limit orders
6. Place your trade and monitor it

Stock trading

1. Open a stock trading account with IG UAE
2. Search for defensive stocks
3. Choose the stock you want to buy – try our stock screener
4. Determine how many shares you want to purchase
5. Place your order
6. Monitor your investment and collect any dividends

FAQs about defensive stocks

Footnotes
 

1. TradingView, November 2025
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3. TradingView, November 2025
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10. TradingView, November 2025