Define: Defensive Stock

UK Accounting Glossary

Definition: Defensive Stock



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Full Definition of Defensive Stock


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.


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Definition Sources


Definitions for Defensive Stock are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 7th February 2020.