Defensive stocks may be helpful to counter the market volatility caused by Russia’s invasion of Ukraine.
With the Russia-Ukraine war injecting major volatility into the equity market, you might be considering a move into defensive stocks.
Here is a list from Goldman Sachs of defensive names that have a long history of beating the overall market, as cited by CNBC.
Microsoft (MSFT) – Get Microsoft Corporation Report, Johnson and Johnson (JNJ) – Get Johnson & Johnson Report, Visa V, Procter & Gamble (PG) – Get Procter & Gamble Company Report, Mastercard (MA) – Get Mastercard Incorporated Class A Report, AT&T (T) – Get AT&T Inc. Report, UnitedHealth (UNH) – Get UnitedHealth Group Incorporated Report, Verizon (VZ) – Get Verizon Communications Inc. Report, Coca-Cola (KO) – Get Coca-Cola Company Report and Merck (MRK) – Get Merck & Co., Inc. Report.
Morningstar analyst Dan Romanoff is bullish on Microsoft, putting fair value at $352, compared to Thursday’s close of $294.59.
He was impressed with Microsoft’s earnings for the quarter ended Dec. 31, which were released last month.
“Wide-moat Microsoft reported solid results driven by strength in more personal computing, while enterprise-related revenues were more in line with our robust expectations,” Romanoff wrote in a commentary.
“Given the ongoing sell-off in software, we are encouraged by results, which suggest digital transformation-led demand remains intact,” he said.
“Guidance [for the current quarter] was ahead on revenue compared to the FactSet consensus as well. Management sees no signals that demand is slowing. Azure remains a bright spot, with Windows and Gaming also performing well.”
As for Johnson & Johnson, its fourth-quarter results, released last month were reassuring.
“[They] einforce our conviction for solid future growth, especially in the drug group (close to 60% of sales) that carries some of the most innovative products and support the firm’s wide moat,” Morningstar analyst Damien Conover wrote in a commentary. “The device group looks well positioned for growth.”
He puts fair value at $167, compared to Thursday’s close of $158.14.