Business, Legal & Accounting Glossary
A defensive stock is one whose profits are minimally impacted by economic downturns. A defensive stock may be found in sectors such as utilities, food, and consumer staples. The common thread is companies providing non-discretionary goods and services necessary for everyday life. A defensive stock may use its more predictable earnings to pay a regular dividend. A defensive stock that is also a blue chip is sometimes referred to as a Widows-and-Orphans stock.
The downside to holding a defensive stock is an economic recovery won’t bring an upsurge in profits. The opposite of a defensive stock is a cyclical stock, one that outperforms during economic upturns. Examples include companies providing discretionary consumer goods such as automobiles, homes, and travel services.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Defensive Stock are sourced/syndicated and enhanced from:
This glossary post was last updated: 7th February, 2020 | 0 Views.