3 Defensive Stocks to Buy as Economic Uncertainty Lingers

Key Points

• Defensive stocks with pricing power and global reach can protect investors during economic slowdowns.
• Steady dividends, strong balance sheets, and disciplined management make these blue-chip companies reliable holdings.
• Investors seeking stability should consider companies with consistent demand, efficient operations, and margin recovery potential.

Investors are advised not to fight the trend. Right now, the trend for stocks remains bullish. That's kept technology stocks, particularly AI stocks, moving higher. But the stock market isn’t the economy, and there are worrisome signs that the economy is slowing down.

That slowdown isn’t showing up in gross domestic product (GDP), but productivity may be coming at a cost to the labor force. At least, that's what the latest jobs data and consumer sentiment show.

Plus, the government shutdown makes it clear that, unlike 2021, the government isn’t coming to the rescue. And if the shutdown lingers, it will start to have a larger ripple effect on the economy.

Statistics can indeed make both sides of an argument. The bulls control the market, but uncertainty still runs the economy. That’s a reason for investors to consider adding defensive stocks. It shouldn’t be a contrarian argument to diversify, but in 2025, that may be the case.

Nevertheless, protecting your wealth has never been more critical. That’s a key reason to look at these three blue-chip favorites.

Consumer Loyalty Keeps the Growth Story Alive

In the past five years, Costco Wholesale Corp. NASDAQ: COST has proven its value to both consumers and investors. The company has continued to be a go-to destination for its millions of members, who have shown no signs of resisting the modest increase in the company’s membership fee. In fact, when consumers feel stressed about higher prices, buying in bulk makes more sense.

Investors have been rewarded with year-over-year comparable sales growth, which results in revenue and earnings that fuel buybacks and dividends. Those dividends supplemented the total return in COST stock by over 175%. There’s a reason why it’s a favorite of buy-and-hold investors.

A reasonable concern may be the stock’s price. At over $930 per share, many retail investors who prefer to buy whole shares may stay away. But price and value are different things. Even at 51x forward earnings, COST stock isn’t expensive relative to its history.

Energy Discipline Drives Long-Term Value

In contrast to Costco, energy stocks like Chevron Corp. NYSE: CVX have been poor investments for growth investors. The long-awaited rise in crude oil prices has failed to materialize. An end to hostilities in the Middle East makes lower crude prices more likely, not less.

Still, energy demand will likely increase for crude oil and natural gas, including liquified natural gas (LNG), one of Chevron’s specialties. The company has significant international LNG exposure through its Australian operations.

Analysts expect this to be a substantial source of revenue as Asian markets move away from coal.

Chevron has also shown a disciplined approach to managing growth by prioritizing stable capital and cash flow over chasing volume. That’s helped CVX stock remain resilient despite volatile crude oil prices.

CVX stock looks fairly valued at around 13x earnings. In fact, with analysts forecasting earnings growth of over 16.5%, the stock may be trading at a discount.

This Defensive Classic Is a Value Opportunity

The Clorox Company NYSE: CLX is the contrarian pick among this group of defensive stocks. The five-year stock chart is a mess, reflecting the company’s struggle to increase demand after a pandemic-led surge. CLX stock is trading near six-year lows.

The bears believe it could move lower. However, even if it does, CLX stock looks like a buying opportunity. As seen in its most recent earnings report, the company’s operating margins are improving, and it continues to modernize its operations, which is helping to cut costs.

The stock has tested support around the $118 level multiple times in 2025, establishing what now looks like a solid base. That technical floor, combined with its current valuation, positions CLX as a potential value play—provided the dividend remains secure. To support that payout and regain investor confidence, the company will need to demonstrate clear improvements in both revenue and earnings growth going forward.