2 Top Defensive Stocks to Add Before Turbulence Hits

These two top defensive stocks could be some of the best picks in Canada, and around the world, for long-term investors right now.

| More on:
Volatile market, stock volatility

Image source: Getty Images

This never-ending bull market has been great. Investors have looked to growth stocks for performance, almost entirely forgetting about the value defensive stocks and a diversified portfolio can provide. As Foolish investors, there’s certainly the tendency to move up the risk spectrum in times like these.

Of course, staying disciplined isn’t easy. However, in these rather frothy times, adding to one’s exposure in defensive stocks could turn out to be a very solid move.

Here are two of my top picks in this regard.

Top defensive stocks: Nutrien

Looking at the stock chart of Nutrien (TSX:NTR)(NYSE:NTR), investors might make the mistake that they’re looking at a growth stock. After all, Nutrien stock is up approximately 50% over the past year. That’s not bad for investors looking to add some defensiveness to their portfolio.

Indeed, Nutrien is one of the defensive stocks I’ve been pounding the table on for a long time. A provider of potash and other minerals uses as fertilizers, Nutrien’s business model is extremely stable. As long as agricultural production continues to increase to keep up with population growth, investors stand to reap the benefits.

Now, a dependency on commodity prices can in and of itself be risky. This isn’t a stock without risk. However, for those with a very long-term investing time horizon, Nutrien’s built-in natural growth rate tied to population growth provides a very strong long-term catalyst.

My view is that commodity prices may actually not be exorbitantly high right now. Rather, prices have caught up to the longer-term trends already underway (and were therefore underpriced previously).

Accordingly, Nutrien is among the defensive stocks that I think provide real value right now. This company’s 2.7% dividend yield is simply the cherry on top.

Barrick Gold 

As far as defensive stocks go, gold miners have to be right up there with the top stocks investors look at. And in this space, Barrick Gold (TSX:ABX)(NYSE:GOLD) remains a top choice for many investors — for good reason.

This gold miner’s reserves are among the largest in the world. Barrick is also one of the largest producers by volume, bringing in 4.8 million ounces in 2020 alone. This year, those numbers should be better, given Barrick’s recent quarterly earnings results.

Rising gold prices have made Barrick’s fundamentals much more attractive to long-term investors. Indeed, this is one of a growing group of defensive stocks that are seeing multiple expansion for the first time in a while. Accordingly, there may be some hesitancy to look at this stock right now.

I remain bullish on the prospects for gold. In this context, Barrick appears to be one defensive stock worth a look right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd.

More on Dividend Stocks

Dividend Stocks

2 of the Best Dividend Stocks to Buy Before They Start to Recover

These dividend stocks offer superior deals for those seeking long-term passive income, but these prices certainly won't last forever.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Algonquin Insiders Are Loading Up on AQN Stock – Should You Follow?

Algonquin Power and Utilities (TSX:AQN) insiders poured millions into AQN stock last week. Share valuation multiples seem compelling.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

TFSA: 2 Stocks To Earn Passive Income Even in a Recession

Investors are coping with 2023 recession fears differently. Some are investing in stocks that can create long-term passive income.

Read more »

Cogs turning against each other
Dividend Stocks

3 Stocks You Can Confidently Own in an Upside-Down Market

Although many stocks have lost major value this year, here are three high-quality companies you can confidently own in this…

Read more »

Increasing yield
Dividend Stocks

2 Ultra-High-Yield Dividend Stocks on Sale Today

Besides their ultra-high yields, here are more factors that make these two of the best Canadian dividend stocks worth buying…

Read more »

money cash dividends
Dividend Stocks

These Canadian Stocks Actually Pay You to Own Them

While the stock market continues to face significant headwinds, consider these Canadian stocks that will pay you to own them.

Read more »

The sun sets behind a high voltage telecom tower.
Dividend Stocks

3 Top Utility Stocks to Buy Right Now

Are you looking for utility stocks to add to your portfolio? Here are three top picks!

Read more »

ETF chart stocks
Dividend Stocks

My Favourite Investing Ideas on the TSX Today

Investors can bet on TSX energy and bank stocks using these two ETFs.

Read more »