And why not? There are a host of headwinds facing stocks as we head into the new year, be it high share prices, interest rates, slowing economic growth across the world or trade uncertainty, among other negative factors.
"For equity investors, risk is high and the margin of safety is low because stock valuations are elevated compared with history," Goldman Sachs Chief Equity Strategist
No wonder defense is in. Companies from sectors such as health care and consumer staples offer goods and services that people need no matter what the economy is doing, which leads to more reliable revenues and profits. Still, even outside those sectors, there are a few resilient blue chips that either dominate their market so completely or offer such diversified product lines that they can hang in most market environments. These are the kinds of stocks investors want to pile into.
Here are seven "Strong Buy" defensive stocks to buy as we head into 2019. We used TipRanks' Stock Screener to pinpoint "safer" stocks that
Dollar General
Market value: $28.0 billion
Dividend yield: 1.1%
TipRanks consensus price target: $120.57 (14% upside potential)
TipRanks consensus rating: Strong Buy
But analysts aren't fazed.
"We are maintaining DG's top pick status," Oppenheimer's
Parikh's positive views are based on multiple factors including a runway for further store growth, a history of strong returns, and potential for initiatives to sustain top-line momentum and even drive a pickup in more discretionary categories. He recommends investors take advantage of any weakness by jumping in during dips.
You can learn more about the analyst community's views on
Waste Management
Market value: $38.9 billion
Dividend yield: 2.0%
TipRanks consensus price target: $97.50 (7% upside potential)
TipRanks consensus rating: Strong Buy
Waste Management (WM, $91.38) is the largest environmental solutions provider in
The stock recently earned a rare "double upgrade" from Goldman Sachs. Goldman's
"Given the age of the current business cycle and expectations for slowing economic growth, we believe now is the right time to own waste stocks," Maguire writes. "The waste sector not only compounds earnings growth at a higher rate than the overall market, but it does so with much less volatility and draw-downs in its earnings."
Bear in mind, shares are enjoying an 8% gain in 2018 despite the treacherous market conditions. See what other experts are saying with TipRanks' WM Research Report.
Canadian Pacific Railway
Market value: $26.7 billion
Dividend yield: 1.0%
TipRanks consensus price target: $241.40 (27% upside potential)
TipRanks consensus rating: Strong Buy
Shareholders also enjoy a modest dividend - a payout that should get larger over time. "With stable capital expenditure requirements and clean balance sheets, we believe that the industry is positioned to generate increasing free cash flow that will in turn drive up shareholder returns through sustained growth in dividends and share repurchases," Spracklin writes.
He reiterated his "Buy" rating on CP, noting that shares are trading at an attractive discount to peers that makes this investment opportunity "very compelling." Investors interested in more analyst feedback on Canadian Pacific can find it in this free CP Research Report from TipRanks.
Estee Lauder
Market value: $50.3 billion
Dividend yield: 1.2%
TipRanks consensus price target: $152.00 (8% upside potential)
TipRanks consensus rating: Strong Buy
Beauty giant
"We continue to look very favorably upon EL's longer-term prospects," Oppenheimer's Parikh wrote following the results. He also recently reiterated his "Buy" rating with a $148 price target.
The analyst's long-term bullish thesis? "We believe the company's positioning to the global prestige beauty category, a strong management team under the leadership of CEO
The Q1 beat also prompted Credit Suisse's
Boston Scientific
Market value: $49.7 billion
Dividend yield: N/A
TipRanks consensus price target: $42.71 (15% upside potential)
TipRanks consensus rating: Strong Buy
Health care stocks can certainly have their ups and downs - especially smaller biotechnology companies whose fates rest on one or only a few trial-stage drugs making it all the way to medical approval. But other healthcare stocks, with greater product diversification, are able to more safely take advantage of a generational shift. Roughly 10,000 Baby Boomers enter retirement each day, and as this massive generation continues to age, they require more medical products, services and attention.
One sometimes overlooked area is medical-tech, which includes the likes of
The stock, which has surged nearly 50% this year, is buzzing again on news that it's acquiring
"We believe BTG's interventional medicine (IM) segment complements BSX's Peripheral Intervention (PI) business as well as other recent acquisitions" Needham's
"In contrast to BSX's recent tuck-in deals, BTG is a larger deal and offers near-term accretion," he says, which is good because accretive mergers and acquisitions are part of Needham's larger bullish thesis on
Deere
Market value: $47.8 billion
Dividend yield: 2.1%
TipRanks consensus price target: $182.71 (23% upside potential)
TipRanks consensus rating: Strong Buy
When you think of tractors, you think of
Tiss predicts "years of growth and margin expansion ahead" but cautions that it is difficult to predict the exact timing of the farming machinery replacement cycle. Tiss has a bullish $195 price target on DE, indicating that upside can top 30%.
Baird's
In the near-term, Dobre highlights improvements in the
Market value: $27.2 billion
Dividend yield: 0%
TipRanks consensus price target: $161.57 (22% upside potential)
TipRanks consensus rating: Strong Buy
According to five-star Oppenheimer analyst
"With the exchange business expected to continue its growth, supplemented by long-term opportunities across Medicare, Medicaid and international,
As a result, he believes
Harriet Lefton is a Contributing Writer at Kiplinger.