Top defensive stocks to watch in 2026

What are defensive stocks?

Many traders and investors look for stability when markets turn volatile. Defensive stocks offer exactly that, providing a buffer against market uncertainty through their unique business qualities. Understanding what makes these stocks 'defensive' can help traders and investors identify strong candidates for more resilient portfolios.

What makes a stock 'defensive'?

Let's clear up a common confusion right away - defensive stocks have nothing to do with military defence or weapons manufacturers. The term 'defensive' refers to their financial characteristics, not their industry.

These stocks are shares in companies that provide essential goods and services that people need regardless of economic conditions. Think everyday necessities like food, electricity, healthcare and telecommunications. These companies maintain steady business even during economic downturns because people continue to use their products and services.

Key characteristics of defensive stocks

The term 'defensive' comes from how these stocks help defend your investment portfolio during market turbulence - they typically maintain more stable performance when markets get rocky. This defensive quality comes from their:

• Steady, predictable demand for essential products/services
• Consistent revenue streams regardless of economic conditions
• Typically lower volatility compared to growth stocks
• Generally reliable dividend payments

Singapore's defensive stock landscape offers several strong options across key sectors. These companies provide essential services that people need in both good times and challenging economic periods.

Balancing stability with trade-offs

While defensive stocks provide crucial portfolio stability, they come with certain limitations. Their growth potential typically falls below what you might see from technology or other growth stocks. They also tend to react negatively when interest rates rise, as their dividend yields become less attractive compared to fixed-income investments.

Despite these considerations, defensive stocks serve as valuable portfolio components. During market turbulence, while other investments might struggle, these stocks often maintain their ground, providing both stability and often continued dividend income.

Why defensive stocks shine when markets tumble

Standard investment wisdom tends to glorify high-growth stocks that make headlines. But in Singapore's sometimes volatile market, defensive stocks often prove to be the unsung heroes of savvy portfolios.

1. Cash flow champions in uncertain times

When tech stocks declined sharply during the 10.7% market correction in April 2025, Singapore's defensive companies maintained their consistent dividend payments.

What makes this powerful:

• Singapore's top defensive picks offer yields between 3.6-5.2%¹ in 2025, significantly higher than the STI's average
• Singtel's 5.2% dividend yield has shown notable resilience through market fluctuations²
• These dividend payments continue regardless of share price movements
• Particularly valuable during retirement or when steady income is needed

Singapore's one-tier tax system makes these dividend streams especially valuable - you get your full dividend without additional tax burdens, unlike interest income from bonds or fixed deposits³.

2. The "sleep well" advantage

Perhaps the most underrated benefit of defensive stocks is something you can't measure on a balance sheet: peace of mind.

Recent proof:

• During April 2025's market correction when the STI dropped 10.7%, telecom sector stocks actually rose 6.8% while utilities gained around 4%⁴
• DBS showed greater stability during this period compared to more volatile tech stocks
• Sembcorp's regulated revenue model provides predictability that other investments lack

This stability means less time worrying about market fluctuations and more time focusing on your broader financial plans - an advantage rarely discussed in financial literature but valuable for investors.

3. Singapore's unique defensive edge

Singapore's defensive stocks benefit from structural advantages compared to their global counterparts.

What sets Singapore's defensive plays apart:

• Robust regulatory frameworks enhance stability for essential service providers
• Companies with government connections (like Singtel) often maintain strategic positions
• Geographic diversification as many Singapore companies operate across Southeast Asia
• Demonstrated resilience through various regional economic challenges

This Singapore advantage was evident during recent market volatility, with its defensive sectors showing stronger stability compared to regional alternatives.⁵

4. The contrarian's strategic advantage

While many investors react emotionally during market uncertainty, strategic traders and investors often take a different approach - and Singapore's defensive stocks can provide opportunities during market fluctuations.

Strategic advantages:

• Defensive stocks typically experience smaller declines, preserving more capital for future opportunities
• Consistent dividends can be reinvested at potentially favourable prices during market corrections
• Lower volatility metrics (beta values below 1.0)⁶ often mean less price recovery needed to regain previous positions
• Provides a more measured foundation for decision-making during market uncertainty

Given Singapore's reputation for stability during regional economic fluctuations, these stocks can contribute significantly to portfolio resilience.

Top 5 defensive stocks to watch in Singapore

1. Singtel (SGX: Z74)

Industry: Telecommunications
Market cap: S$73.7 billion

Latest earnings: For the first half of 2026 (H1 FY2026), Singtel reported net profit of S$3.40 billion, a sharp increase from S$1.23 billion a year earlier, boosted by a net exceptional gain of S$2.05 billion from the partial sale of Airtel and the Intouch-Gulf merger. Underlying net profit rose 14% YoY to S$1.35 billion, driven by strong contributions from Airtel, AIS, NCS, and Optus. 

Financial position: Free cash flow improved 11% YoY to S$1.45 billion. Net debt fell to S$8.7 billion, with gearing ratios improving thanks to asset recycling proceeds. Close to 90% of debt is hedged at fixed rates, and all foreign currency debt is fully hedged. 

Analyst ratings and share price targets: Singtel shares have an overall ‘buy’ rating based on FactSet analyst insights published by the IG Markets app. The stock also has an average 12-month price target of S$5.24, indicating a 17% upside from the last traded price. 

Business outlook: Management revised FY2026 OpCo EBIT (earnings before interest and taxes) growth guidance to between high single digits and low double digits, reflecting strong momentum from Airtel, AIS, NCS, and Optus, while acknowledging uncertainty from the Optus outage in September 2025. 

2. Sheng Siong Group (SGX: OV8)

Industry: Supermarkets and grocery retail
Market cap: S$4.1 billion

Latest earnings: Sheng Siong reported net profit of S$43.8 million for the third quarter (Q3) of FY2025, a 12% YoY increase. Revenue rose 14.4% YoY to S$415.5 million, driven by new store openings and improved same-store sales. Gross profit margin improved slightly to 31.5%, supported by better product mix and cost discipline. 

Financial position: For the first nine months (9M) of FY2025, operating cash flow stood at S$186.5 million, compared to S$173.2 million in the prior year. Free cash flow was S$167.8 million, up from S$156.4 million in 9M FY2024, after accounting for capital expenditure of ~S$18.7 million. Sheng Siong remains debt-free, with cash and cash equivalents of ~S$330 million as of 30 September 2025.

Analyst ratings and share price targets: Sheng Siong shares were rated ‘buy’ by 63% of analysts polled by FactSet as of early-January 2026. The stock has an average 12-month price target of S$2.51 per share. 

Business outlook: Management remains focused on network expansion, margin resilience, and operational efficiency. The group plans to open a new store at Leisure Park Kallang in Q4 FY2025, following the opening of four new stores in Q4 FY2025.

3. Raffles Medical Group (SGX: BSL)

Industry: Healthcare services
Market cap: S$1.9 billion

Latest earnings: For the first half (H1) of FY2025, Raffles Medical Group reported revenue of S$397.3 million, a 5.1% YoY increase from S$378.1 million in 1H FY2024. Net profit attributable to shareholders rose 7.2% YoY to S$65.9 million, compared to S$61.5 million a year earlier. Operating profit margin remained stable at ~17%.

Financial position: For H1 FY2025, operating cash flow stood at S$92.4 million in H1 FY2025, up from S$87.6 million a year ago. Free cash flow was S$78.6 million, after accounting for capital expenditure of ~S$13.8 million. Cash and cash equivalents remained ‘strong’ at S$334.2 million as of 30 June 2025.

Analyst ratings and share price targets: FactSet consensus ratings leaned towards ‘buy’ (75% of analysts) in January 2026, with average 12-month price targets implying ~10% to 15% upside from latest price levels. 

Business outlook: Management emphasised continued expansion in China, particularly Raffles Hospital Shanghai, alongside steady demand for healthcare services in Singapore. The Group remains focused on enhancing patient experience, digital health initiatives, and sustainability reporting. 

4. Vicom (SGX: WJP)

Industry: Vehicle inspection and testing services
Market cap: S$589 million

Latest earnings: Vicom reported Q3 FY2025 revenue of S$32.9 million, a 21.7% YoY increase. Net profit rose 45.2% YoY to S$9.9 million from S$6.8 million a year earlier. Growth was driven by higher vehicle inspection volumes and strong demand for ERP 2.0 On-Board Unit (OBU) installations. Vicom installed 78,000 OBUs in 3Q FY2025, up from 71,000 in 2Q FY2025, underscoring momentum in regulatory-driven demand.

Financial position: For 9M FY2025, operating cash flow stood at S$28.4 million, compared to S$22.7 million in 9M FY2024. Free cash flow was S$25.1 million, after accounting for capital expenditure of ~S$3.3 million. Vicom remains debt-free, with cash and equivalents of S$120.5 million as of 30 September 2025.

Analyst ratings and share price targets: Maybank analyst Thilan Wickramasinghe highlighted Vicom as a potential domestic defensive play amid Singapore market reforms in an October 2025 report. 

Business outlook: Vicom’s earnings are underpinned by regulatory-driven demand for inspections and ERP 2.0 installations. With the ERP 2.0 rollout continuing into 2026, management expects sustained growth in inspection and testing services.

5. ST Engineering (SGX: S63)

Industry: Aerospace, defense, and engineering
Market cap: S$28.8 billion

Latest earnings: ST Engineering reported group revenue of S$9.1 billion for 9M FY2025, a 9% YoY increase, driven by strong performance across its main business segments. In Q3 FY2025 alone, group revenue rose 13% YoY to S$3.1 billion. STE’s order book reached a ‘record’ S$32.6 billion as of 30 September 2025, with S$2.8 billion scheduled for delivery in the remainder of FY2025.

Financial position: The group divested LeeBoy, CityCab, and SPTel, generating S$594 million in cash proceeds and S$258 million in after-tax gains, strengthening liquidity in the process.

Analyst ratings and share price targets: FactSet analyst ratings are mostly split between ‘buy’ (43%) and ‘hold’ (43%), with the remaining (14%) on ‘sell’. Share price target (12-month average) was S$8.90, equating to a slight downside. 

Business outlook: Group President & CEO Vincent Chong said the company remains focused on executing mid-term plans, reinvesting in strategic growth areas, and leveraging its strong financial position.

How to trade and invest in defensive stocks with IG Singapore

CFD share trading
 

1. Create a live or demo account
2. Find an opportunity among one of our 10,000+ stocks with our  stock screener
3. Click ‘buy’ to go long or ‘sell’ to short
4. Set your position size
5. Take steps to manage your risk
6. Open and monitor your position

Investing
 

1. Open an account via IG Markets Singapore app
2. Search for defensive stocks on the app
3. Choose the shares you want to buy
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 Dividend yield data sourced from Singapore Exchange (SGX) market data, May 2025
2 https://sginvestors.io/analysts/research/2025/01/singtel-uob-kay-hian-research-2025-01-21
3 https://www.iras.gov.sg/taxes/individual-income-tax/basics-of-individual-income-tax/what-is-taxable-what-is-not/dividends
4 Based on SGX sector performance data during the April 2025 market correction following US tariff announcements, when the STI declined 10.7% while defensive sectors showed significantly less volatility. Source: Reuters, "Singapore's high-yield stocks gain from tariff-induced flight to safety," April 24, 2025.
5 Historical performance analysis of Singapore market sectors during 2020-2025 economic cycles, as documented by DBS Research in their "Singapore Equity Picks" report, April 2025.
6 Beta values calculated based on 3-year correlation with Straits Times Index (STI), as reported in DBS Stock Pulse, April 8, 2025.